Reason Foundation - Authorshttp://www.reason.org/authors
info@reason.org (Reason Foundation)http://www.pjdoland.com/chai/?v=0.1California's Proposition 52: State Fees on Hospitals. Federal Medi-Cal Matching Funds.http://www.reason.org/news/show/california-proposition-52
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 52 would make permanent a means of acquiring federal Medi-Cal funding charging hospitals a fee, and then returning the fee money to them along with the matching federal funds. It would also raise the requirement to a 2/3 vote of the legislature to change fee rates or to turn away federal matching dollars and instead use the hospital fees for other budget purposes.&nbsp;</p>
<p><strong>Fiscal Impact:</strong> <br /> <br />The fiscal effect of this measure is uncertain primarily because it is not known whether the legislature would have extended the hospital fee absent the measure. If the legislature would have extended the hospital fee absent this measure, the measure would likely have relatively little fiscal effect on the state and local governments. If the legislature would not have extended the hospital fee absent the measure, the measure could result in state General Fund savings of around $1 billion annually and increased funding for public hospitals in the low hundreds of millions of dollars annually <br /> <br /><strong>Proponents&rsquo; Arguments For:</strong> <br /> <br />Proponents of Prop 52 argue that the tax on hospitals has been effective for years. The tax revenues are used to get approximately $3 billion per year in matching federal dollars for state Medi-Cal programs that provide vital medical services for millions of Californians. <br /> <br />They argue that each time the legislature has renewed the tax, there have been attempts to divert the funds to other state budget areas and thus lose the federal matching funds and cut Medi-Cal funding overall. Prop 52 makes the tax permanent so the legislature would not have to renew it again, and prohibits using the tax revenues for other budget purposes or changing the tax levels without consent by popular vote or 2/3 of the legislature. <br /> <br /><strong>Opponents&rsquo; Arguments Against:</strong> <br /> <br />Opponents of Prop 52 argue that its tax revenues and the $3 billion in matching federal dollars are simply given to hospitals with no oversight or even requirement that it is spent providing health care services. Hence a lot of the money simply goes to high pay and perks for hospital CEOs. They argue that making the tax permanent and requiring the state to give it back to hospitals with the matching federal dollars is exactly what the hospitals and their lobbyists want because it removes the legislature from any oversight of how the money is used. As a consequence few of those dollars will go to helping poor people but instead will go to hospital owners and administration. <br /> <br /><strong>Discussion:</strong> <br /> <br />From the perspective of Medi-Cal funding, the practice of imposing a tax on hospitals and using those funds to provide a dedicated source of revenue to leverage matching federal dollars makes basic fiscal accounting sense. But the devil is in the details.&nbsp;<br /> <br />Given the California Legislature&rsquo;s addiction to spending, it is no surprise that once the tax on hospitals is in place, they are constantly tempted to redirect that money to other budget areas that match legislators&rsquo; current priorities. When that happens hospitals make up the difference by charging the patients more. If the legislature actually valued and prioritized funding health care services, there would be sufficient funding in the budget to leverage the matching federal dollars with no need for a special tax. <br /> <br />At the same time, the overwhelming majority of hospitals are supporting Prop 52 not because they love having to pay a special tax, but because it better ensures they get the extra $3 billion in matching federal funds each year&mdash;with no legislative oversight of how the money is spent. <br /> <br />The fact is, we have nothing remotely resembling a free market in health care. A great deal of the funding is controlled by government, insurance is heavily controlled by government now, and many hospitals are government-owned and operated. Given that, this mechanism for leveraging federal funds does not make the system any worse, nor does it make it any better. <br /> <br />There should be legislative scrutiny of the use of all public funds, including for health care. That Prop 52 fails to add any accountability to replace the legislative oversight it takes away is problematic. Not that legislative oversight is very effective in California&mdash;failure to accomplish the goals of state funding almost never results in the loss of state funding. The issue of accountability for how hospitals use Medi-Cal funding is much bigger than Prop 52 and should be resolved comprehensively.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014662@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 51: School Bonds. Funding for K-12 School and Community College Facilities.http://www.reason.org/news/show/california-proposition-51
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 51 allows the state to issue up to $9 billion in bonds to fund local K-12 and community college improvement, rebuilding and new building projects. <br /> <br /><strong>Fiscal Impact:</strong> <br /> <br />The bond would ultimately cost $17.6 billion to the state, accruing $8.6 billion in interest over the life of the bond. It would cost the state about $500 million per year. <br /> <br /><strong>Proponents&rsquo; Arguments For:</strong> <br /> <br />Proponents argue that there are massive backlogs of projects to improve California schools and community colleges or build new ones. The partnership between state government and bond funds and locally approved projects has worked well for decades, and it has been ten years since the last statewide school bond. Without a new school bond, educational facilities will continue to deteriorate and become less safe. Local government may then have to raise local taxes or fees in order to fund needed improvements. <br /> <br />While the state provides the funding via the bond, local school boards will plan and approve all projects and control how the money is spent. California&rsquo;s future depends upon an improved education system and this bond is vital to providing that. <br /> <br /><strong>Opponents&rsquo; Arguments Against:</strong> <br /> <br />Opponents argue that state bonds are not the best way to fund local school and community college projects. Too much of the money goes to well-off districts with lots of new development. Governor Jerry Brown called Prop 51, &ldquo;the developers&rsquo; $9 billion bond,&rdquo; noting that it &ldquo;promotes sprawl and squanders money that would be far better spent in low-income communities.&rdquo; <br /> <br />California has run up an absurd amount of school bond debt already. Right now the state pays about $2 billion per year in payments on the existing $45 billion in school bonds outstanding. This measure would tack on another $500 million per year. It is long past time for some scrutiny on the use of past school bonds and why that money hasn&rsquo;t been enough to keep up. <br /> <br />If there are legitimate local needs for school or community college construction funds, local governments can, and do, issue their own bonds to fund it. Voters approve three out of four local school bonds on the ballot, so school districts have access to capital if they need it. <br /> <br />Local funding along with local project development and oversight is more accountable to taxpayers and less likely to fund boondoggles or tax people in one county for projects built in another. <br /> <br /><strong>Discussion:</strong> <br /> <br />The first thing to consider when thinking about Prop 51 is to remember 2012 when voters approved Prop 30, a &ldquo;temporary&rdquo; tax increase to fund schools and community colleges. But here we are four years later, and look at Prop 55 on the ballot&mdash;a 12-year extension of that &ldquo;temporary&rdquo; tax hike for schools and community colleges. So both want another big tax hike and another huge pile of debt. <br /> <br />At the same time, total school enrollment in California has fallen steadily since 2004. Since the last time voters approved a statewide school bond 10 years ago, and certainly since the last big tax increase for education four years ago, the number of kids in California schools has declined! Yet the &ldquo;need&rdquo; for more funding keeps growing. <br /> <br />&ldquo;But that &ldquo;need&rsquo; is very suspect when you consider that Sacramento pulled a nifty bait and switch with the Prop 30 tax hike funds. The $6 billion raised by that &ldquo;temporary&rdquo; hike went into the school budget, but then the legislature and governor <em>took</em> $6 billion in other funds out of the education budget and used it for other parts of the budget. <em>No net new money went to schools.</em> <br /> <br />Why would Californians approve adding more debt to such an absurd, politically motivated system? <br /> <br />Californians have clearly signaled that education is important to them and they should demand a system than makes effective and efficient uses of resources without burying them in debt.Citizens should not continually bail out a system that constantly needs more money to serve fewer kids. A much better idea would be to push school districts and community colleges to better manage the funds and facilities they have based on the following: <br /> <br />&middot; Local funding, and if need be, debt, along with transparency and local oversight, is more accountable and efficient in providing construction funds.</p>
<p>&middot; The need for facility improvement and new facilities should be based on objective local analysis of enrollment trends, existing facilities, and all available options, not obscured in a statewide, politically driven allocation of funds.</p>
<p>&middot; There are many creative ways to provide new facilities or even upgrade existing ones, including turnkey facilities provided as part of major new developments or public-private partnerships for renovations. <br /> <br />Everywhere in the economy we see things getting cheaper to produce. Technological improvements and more competitive materials markets mean schools should also see efficiencies in construction costs. Districts need to use the construction market to contain the costs of new school projects or major improvements, not have the costs go up every time.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014661@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 57: Parole for Non-Violent Criminals and Juvenile Court Trial Requirementshttp://www.reason.org/news/show/california-proposition-57
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 57 does two things. First, it broadly creates a good behavior credit program for current nonviolent offenders to get parole once their primary sentence is served. Second, it transfers the decision about whether juveniles should be tried in adult court from prosecutors to juvenile court judges. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />The state will have net savings from those inmates released from prison onto parole that could be tens of millions of dollars. Likely the costs to implement the law of a few million dollars per year spread over all counties. <br /> <br /><strong>Proponents&rsquo; Arguments For: </strong> <br /> <br />Proponents argue that California&rsquo;s prison population has grown dramatically and costs more than $10 billion every year. In 2009, the Supreme Court ruled California&rsquo;s prison conditions unconstitutional and overcrowded, and mandated the state reduce its prison population. Prop 57 gives California a safe and effective way to comply with the mandate and avoid a court-ordered release of dangerous prisoners. <br /> <br />This measure will not simply dump violent criminals back onto the street. Only nonviolent offenders are eligible for the program, and even they must demonstrate a consistent pattern of good behavior. Prop 57 make this easier for inmates because it offers them credit for working or getting educated while prison. This will save taxpayer dollars by reducing prison spending and reducing recidivism, while at the same time keeping the most dangerous offenders locked up. <br /> <br />Prop 57 also addresses the rising problem of juveniles who are tried as adults and become career criminals. The current system does nothing to actually rehabilitate criminals once incarcerated, which leads to higher recidivism and crime rates. Evidence also shows that juveniles who are tried in juvenile systems, which are often accompanied by rehab programs, re-offend less. Prop 57 moves the decision about whether or not to try a juvenile as an adult and focus on punishment, or to try them as a juvenile and focus on rehabilitation, from the prosecutors to the juvenile court judges. <br /> <br />While Prop 57 provides an incentive for non-violent felons to demonstrate they deserve parole, no one is automatically released, or entitled to release from prison, under Prop 57. To be released on parole, all inmates must be non-violent offenders in the first place who served their primary sentence, must demonstrate rehabilitation to the satisfaction of the Board of Parole Hearings, and will be supervised by law enforcement after release.. <br /> <br /><strong>Opponents&rsquo; Arguments Against:</strong> <br /> <br />Opponents argue that Prop 57 will allow criminals convicted of many crimes such as rape, lewd acts against a child, gang gun crimes and human trafficking to be released early from prison because the poorly written law fails to define &ldquo;non-violent felonies&rdquo; to exclude a great many heinous and even violent crimes. <br /> <br />Prop 57 would allow unelected bureaucrats to reduce sentences for violent felons and career criminals, ignoring judges who impose multiple sentences. The provisions of many victim protection measures such as Marsy&rsquo;s Law, 3 Strikes, and the Victims Bill of Rights&mdash;all approved by voters&mdash;would be effectively overturned by Prop 57. Worse, new parole hearing requirements would force victims to re-testify, and thereby relive the crimes against them. <br /> <br />Prop 57 would instate all these new privileges and rights for convicted criminals into the California Constitution, where they cannot be changed by the legislature. Violent crime was up 10% in California last year, making Prop 57&rsquo;s provisions affect at least 15,000 dangerous criminals. In this way, Prop 57 would make all Californians less safe. <br /> <br /><strong>Discussion: </strong> <br /> <br />Prop 57 takes a sensible approach to dealing with overcrowding in California prisons and avoiding court-ordered releases of prisoners, but makes a crucial error in not defining the specific offenses it would address. <br /> <br />Proponents say Prop 57 would make about 7,000 California inmates eligible for parole, of which 5,700 already are eligible under a court order. Opponents say the law would make 15,000 inmates eligible for parole. The two sides are not using the same definition of &ldquo;non-violent felon&rdquo; and neither existing state law nor Prop 57 imposes a precise definition. <br /> <br />Prop 57 does say that the Department of Corrections and Rehabilitation must create regulations to implement the law, and it is possible those regulations could impose a precise operating definition of &ldquo;non-violent&rdquo; felonies that would eliminate the most serious problems the opponents raise. <br /> <br />Yet, proponents are correct that California&rsquo;s prison system does little to rehabilitate inmates and so suffers from a very high recidivism rate. Creating incentives to rehabilitate while relieving overcrowding with an orderly and controlled process is clearly better than a rushed release via a court-order. And one or the other will happen. If the voters or the legislature cannot figure out how to move some people safely out of the prison system, then court orders will do it for them.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014667@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 60: Condoms in Pornographic Films http://www.reason.org/news/show/california-proposition-60
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 60 would require that performers in adult films use condoms during sexual intercourse, producers of adult films to obtain a state health license, post condom requirements at film sites, and pay for performer vaccinations, testing and medical exams related to STDs. It allows any state resident, performer, or the state government to enforce violations, and imposes civil liability for non-compliance on producers, distributors, performers and talent agents. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />Likely reduction of state and local tax revenues of several million dollars per year. Increased state costs that could exceed $1 million annually to license and regulate adult film production and to enforce workplace health and safety rules. These costs would be offset to some extent by new fee revenue. <br /> <br /> <br /><strong>Proponents&rsquo; Arguments For: </strong> <br /> <br />Supporters of Prop 60 say it is needed to give teeth to federal law requiring condoms in adult films. <br /> <br />Adult film performers who won&rsquo;t perform without condoms are blacklisted from the industry because producers claim wearing condoms hurts their profits. Performers are even required to pay for their own testing. All this results in more exposure to STDs and HIV and more STDs among performers than the general population. Prop 60 would hold porn producers accountable for the health and safety of their employees and prevents performers from having to risk their health to keep their jobs. <br /> <br />The California health care system bears the cost of STD and HIV among adult film workers, $10 million per year for HIV alone. Prop 60 shifts the burden from taxpayers to adult film producers and gives them responsibility for health and safety in their films. <br /> <br /><strong>Opponents&rsquo; Arguments Against: </strong> <br /> <br />This is the only ballot initiative in this election opposed by both the California Democratic Party and the California Republican Party. The adult film industry is already heavily regulated by county, state and federal governments and the industry has implemented enhanced testing and safety protocols. As a result, Cal/OSHA has not cited a single adult film production company for the transmission of any STD for over 12 years. There is no problem here needing Prop 60 to solve it. The only independent, all-adult performer organization in the state&mdash;in other words, the workers Prop 60 is supposed to be protecting&mdash;oppose it. <br /> <br />Moreover, opponents argue that Prop 60 has nothing to do with worker safety. They contend that Prop 60 is designed to fuel a lawsuit bonanza by empowering any lawyer to sue anyone in the business whom they think can&rsquo;t prove they used a condom in a film. It creates a right to sue virtually anyone involved in a violation of the rule it establishes&mdash;even cable or satellite companies or the injured parties themselves can be sued. In fact, a married couple in their own bedroom who films themselves having sex without a condom and sells the film could be sued, clearly not protecting any workers. No other industry in California faces such lawsuit potential. <br /> <br />Additionally, Prop 60 requires adult film performers to disclose private information including legal names and home addresses to anyone who files an enforcement lawsuit under Prop 60&rsquo;s new rules, creates a state official (who can only be fired by the legislature) to oversee enforcement, and requires state employees to be paid to just watch adult films. It will cost the state tens of millions of dollars, create a wave of intrusive lawsuits, and not protect any workers from any actual harms. <br /> <br /><strong>Discussion: </strong> <br /> <br />Prop 60 looks like a solution in search of a problem. California will become the first state in the nation to incentivize anyone who lives in the state to sue a professional for just doing their job, jumpstarting a lawsuit free-for-all driven by financial gain rather than anything resembling worker protection. Encouraging people to file lawsuits gain financial payoff from the defendants is a terrible incentive and will cost the state millions. Performers will become targeted by stalkers who will have access to their legal names and home addresses, putting them at greater risk for harassment and violence. <br /> <br />The risks associated with the adult industry are addressed in performer contracts, with many performers charging more to have sex in a film without a condom. Adult performers should have control over their bodies and their own sexual health. <br /> <br />Moreover, existing regulations govern transmission of STDs/STIs in adult film production and have found very little to regulate due to the effectiveness of voluntary systems in place within the industry. In the 1990s a series of outbreaks in the industry led to female performers demanding higher pay to compensate for the risks, and some companies began using condoms voluntarily. The industry also created an extensive system of testing and safety measures that have worked extremely well. In 2012 some adult film actors with syphilis triggered the industry to voluntarily suspend all filming to allow performers to be tested and treated and the industry to restart with the outbreak under control. As a result of extensive testing and industry oversight, Cal/OSHA has not cited a single instance of on-set STD/STI transmission in more than 12 years.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014670@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 66: Death Penalty Procedures http://www.reason.org/news/show/california-proposition-66
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide: 2016 California Ballot Initiatives</a></p>
<p>Prop 66 changes the appeals process for death row inmates, limiting repeated attempts to appeal and changes which courts hear initial petitions of appeal. It sets timelines for state court reviews of death penalties. It also removes existing regulations governing execution methods used by the Department of Corrections. <br /> <br />If Prop 66 gets more votes than Prop 62 then the latter is overridden and void. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />The state will initially spend a tens of millions of dollars to reform the system, but will experience as much in savings in court and prison costs each year going forward. <br /> <br /><strong>Proponents&rsquo; Arguments For: </strong> <br /> <br />Proponents of Prop 66 argue that California&rsquo;s death penalty needs to be mended, not ended. It is time to stop the most heinous criminals languishing on death row for 30 years. Prop 66 will speed up death penalty appeals while making sure no innocent person is ever executed. <br /> <br />Prop 66 limits all appeals to 5 years, and requires that lawyers for appeals are assigned immediately from an expanded pool of lawyers, so no more waiting years for a lawyer. The trial court that knows the case will now handle the appeal so a new court does not have to catch up on the initial trial evidence and arguments. The state supreme court will oversee the system and protect the rights of the accused. And the Department of Corrections will reform death row so those inmates no longer get special privileges. <br /> <br />Prop 66 will save taxpayers $30 million annually from shorter appeals and no long holding heinous criminals on death row for 30 or more years. Death penalties are not handed out very often in California and only for murders with &ldquo;special circumstances&rdquo; that make the crime more horrific. Those individuals need to be put to death. <br /> <br /><strong>Opponents&rsquo; Arguments Against: </strong> <br /> <br />Opponents argue that the death penalty doesn&rsquo;t work and that Prop 66 does not fix it. More than 150 people sentenced to death row in America have been proven innocent by later advances in technology and evidence, and others have been executed because of laws like Prop 66 that assume the death penalty is just and effective. <br /> <br />They argue that Prop 66 is complex and confusing and will add more layers of bureaucracy and slow down the justice system even more. While proponents argue that Prop 66 will save money, the independent Legislative Analyst&rsquo;s Office says it will cost tens of millions of dollars annually with additional unknown costs. It will increase prison spending and will require the state to fund as many as 400 new lawyers to work on appeals. <br /> <br />Prop 66 will limit the ability to present new evidence of innocence in court, force unwilling lawyers to serve appeals clients who therefore may not get the best representation, will clog up local courts by pushing appeals down to them instead of in state courts where they now are heard. <br /> <br />Opponents assert that real justice system reform would do far more to fix the California death penalty process than does Prop 66, so we should not waste our resources on its broken ideas. <br /> <br /><strong>Discussion: </strong> <br /> <br />As with Prop 62, both sides admit California&rsquo;s death penalty system does not work. Very few people are sentenced to death in California, and those who are spend an average of 20 years on death row. In the last two decades, on average one person has been executed in California every 1.5 years. And the costs of holding death row inmates in special conditions all those years, with continuous legal counsel and so on, is significantly more that the cost of keeping them in prison for life.. <br /> <br />There is simply no good empirical evidence that the threat of a death penalty deters crime. The kind of people who do the extra heinous murders that lead to death sentences simply are not responding to incentives like the threat of a chance of being executed sometime in the future. <br /> <br />The Legislative Analyst's Office says that life in prison instead of the death penalty for these heinous criminals would save $150 million a year. The costs to keep a death row inmate in prison have been rising rapidly. One of the fastest growing segments of the state budget has been prisons. The death penalty is part of that cost where we are getting little benefit for our spending and creating a less just, not more just, system in the process. <br /> <br />The large number of death row inmates exonerated thanks to new technology and DNA testing makes it very unlikely that there are no innocent people on death row in California or won&rsquo;t be in the future. The justice system is not perfect&mdash;no system can be. With a life sentence, there is at least a chance that a mistake can eventually be discovered and rectified. With the death sentence, once executed, the innocent are forever dead. If the justice system is in fact about justice and not vengeance, there can be no greater injustice than the state killing an innocent person. A &lsquo;mended&rsquo; death penalty does not change that.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014676@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)Voter Guide: 2016 California Ballot Initiativeshttp://www.reason.org/news/show/2016-california-ballot-initiatives
<p>Reason Foundation&rsquo;s policy analysts have studied California&rsquo;s 17 statewide ballot initiatives, some of which will have a significant impact on the state&rsquo;s future. Click on a proposition number below for a detailed examination of the policy issues and the potential fiscal and societal impacts of the initiatives. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-51">Prop 51: School Bonds. Funding for K-12 School and Community College Facilities.</a></strong> <br />Allows the state to issue up to $9 billion in bonds to fund local K-12 and community college improvement, rebuilding and new building projects. Would ultimately cost $17.6 billion to the state, accruing $8.6 billion in interest over the life of the bond and would cost the state about $500 million per year.Enrollment in California&rsquo;s public schools has declined since 2004. In the past, the legislature and governor have diverted funds earmarked for education to other purposes. Prop 51 dis-incentivizes education reform by throwing more money at the current education bureaucracy. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-52">Prop 52: State Fees on Hospitals. Federal Medi-Cal Matching Funds.</a></strong> <br />Attracts $3 billion in matching federal funds, but without any legislative oversight of how the funds are spent. Adds more federal funding to a healthcare system that is anything but a free market and levies a specialty tax on hospitals that ultimately must be passed on to others. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-53">Prop 53: Revenue Bonds. Infrastructure Projects. State Legislature and Voter Approval.</a></strong> <br />Would require voter approval for infrastructure projects that incur more than $2 billion in public debt. Gives voters more say on huge new debt liabilities, like California&rsquo;s high-speed rail project, where the estimated cost to taxpayers has risen from $10 billion to $60 billion. California already has massive debt of between $340 billion to $778 billion. <br /> <br /><a href="http://reason.org/news/show/california-proposition-54"><strong>Prop 54: Public Display of Legislative Bills Prior to Vote</strong></a><br /> Requires bills be printed and available online for 72 hours before a vote. Decreases the power of special interests by increasing the ability of the public to understand and respond to legislation before a vote. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-55">Prop 55: Tax Extension to Fund Education and Healthcare</a></strong> <br />Extends a &ldquo;temporary&rdquo; tax hike from 2012 for 12 more years. Without this tax hike, education funding will still be at least $20 billion higher than it was in 2012&mdash;a massive increase given that the student population shrank during that time. Most of the post-2012 tax increases went to teachers&rsquo; pensions, not to classrooms. Continues one of America&rsquo;s highest state tax rates on successful small businesses and entrepreneurs, driving them elsewhere. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-56">Prop 56: Cigarette Tax to Fund Healthcare, Tobacco Use Prevention, Research, and Law Enforcement</a></strong> <br />Creates a more than 300 percent tax increase not only on cigarettes, but on e-cigarette products. The Royal College of Physicians concluded vaping is &ldquo;at least 95 percent safer&rdquo; than smoking&mdash;making Prop 56 a tax increase that could actually harm public health. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-57">Prop 57: Parole for Non-Violent Criminals and Juvenile Court Trial Requirements</a></strong> <br />Takes a sensible approach to dealing with overcrowding in California prisons and avoiding court-ordered releases of prisoners, but makes a crucial error in not defining the specific offenses it would address. Creates incentives to rehabilitate while relieving overcrowding via an orderly and controlled process, but success would depend on how the Department of Corrections and Rehabilitation implements the law. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-58">Prop 58: Non-English Languages Allowed in Public Education</a></strong> <br />Gives school districts a lot more flexibility to try different types of bilingual programs. Adds accountability and allows parents to make choices, which is lacking under the current system. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-59">Prop 59: Overturn of <em>Citizens United</em> Act Advisory Question</a></strong> <br />Encourages members of California&rsquo;s congressional delegation to seek a constitutional amendment overturning the Supreme Court&rsquo;s 2010 <em>Citizens United </em>decision, which held that political contributions and spending were protected as &ldquo;free speech&rdquo; under the First Amendment. Effectively a quixotic call to regulate free speech. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-60">Prop 60: Condoms in Pornographic Films</a></strong> <br />Existing regulations and voluntary systems already effectively prevent the transmission of STDs/STIs in adult film production. Cal/OSHA has not cited a single instance of on-set STD/STI transmission in more than 12 years. Could create a lawsuit free-for-all and drive a major industry out of state. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-61">Prop 61: Drug Price Standards</a></strong> <br />Would prohibit state agencies from paying more than the price negotiated by the U.S. Department of Veterans Affairs (VA) for a prescription drug. Fails to understand how markets and pricing work and will most likely lead to fewer drug options and higher prices for Californians&mdash;the very opposite of what proponents want to achieve. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-62">Prop 62: Repeal of Death Penalty</a></strong> <br />There is no good empirical evidence that the threat of a death penalty deters crime. The cost of death penalty system is not trivial. Life in prison without parole is justice and protects society without the risk of killing an innocent person. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-63">Prop 63: Background Checks for Ammunition Purchases and Large-Capacity Ammunition Magazine Ban</a></strong> <br />Would require individuals to pass a background check and obtain a license from the government to buy ammunition. A clear attempt by those opposed to the right to keep and bear arms to work around the Second Amendment. Ammunition is necessary to make gun ownership a meaningful right. Won&rsquo;t reduce crime, but would require massive law enforcement resources. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-64">Prop 64: Marijuana Legalization </a></strong> <br />Marijuana use is a personal decision that does not merit the current war against its use&mdash;a war that is an utter failure and costs approximately $8 billion in government expenditures nationwide each year. It is not obvious that Prop 64 would make marijuana any more available than it already is, but it would certainly move the overwhelming majority of marijuana consumption into legal market or personal transactions. <br /> <br /><strong><a href="http://reason.org/news/show/california-propositions-65-and-67">Prop 65: Dedication of Revenue from Disposable Bag Sales to Wildlife Conservation Fund</a></strong> <br />If voters ban plastic bags in Prop 67 and allow stores to charge for other bags, then Prop 65 says those funds must go to an environment fund. Effectively makes a government-mandated bag charge a tax instead of revenue for the business. <br /> <br /><strong><a href="http://reason.org/news/show/california-proposition-66">Prop 66: Death Penalty Procedures</a></strong> <br />Limits repeated appeals by those sentenced to death. <a href="http://reason.org/news/show/california-proposition-62">See the arguments</a> against the death penalty related to <a href="http://reason.org/news/show/california-proposition-62">Prop 62</a>. If both propositions pass, the one with more votes becomes law. <br /> <br /><strong><a href="http://reason.org/news/show/california-propositions-65-and-67">Prop 67: Plastic Bag Ban Veto Referendum</a></strong> <br />Bans plastic bags, even though they comprise less than 1 percent of litter. Banning them won&rsquo;t have a significant impact on the environment. Educating the public, providing accessible garbage bins and cleaning up will reduce litter. Moreover, lightweight plastic bags are, in general, better for the environment than the alternatives.</p>1014660@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)Proposition 65: Dedication of Revenue from Disposable Bag Sales to Wildlife Conservation Fund AND Proposition 67: Plastic Bag Ban Veto Referendum http://www.reason.org/news/show/california-propositions-65-and-67
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 67 would ban stores from providing disposable plastic bags in which to carry purchases. It permits the sale of recycled paper or reusable bags for a minimum price of 10 cents. <br /> <br />Prop 65 says that if Prop 67 passes, or any other law bans plastic bags, the money from selling other single use bags must go to a fund administered by the Wildlife Conservation Fund. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />Prop 67: relatively small fiscal impact on state and local governments, with a small increase of under a million dollars annually for administrative costs, offset by fees. Reduced litter and waste management costs would provide possible minor savings to local governments. <br /> <br />Prop 65: potential tens of millions of dollars in annual state revenue under certain circumstances. The propositions requires such revenue to support certain environmental programs. <br /> <br /><strong>Proponents&rsquo; Arguments For: </strong> <br /> <br />Proponents of Prop 67 argue that single use plastic shopping bags are a huge litter and environmental problem. Banning plastic shopping bags will keep them out of rivers, lakes, oceans and the landscape, and will save state and local communities tens of millions of dollars in litter clean-up costs. They argue that plastic shopping bags harm wildlife every day and need to be removed from the environment. <br /> <br />Prop 67 continues California&rsquo;s success in phasing out plastic bags. Existing state law and local laws in many communities have banned single-use plastic bags and have seen a nearly 90% reduction in single use bags, as well as strong support from consumers. <br /> <br />Proponents of Prop 65 argue that right now grocery and other stores get to keep all the money they collect charging for carryout bags instead of that money going to help the environment. Those stores will likely make up to $300 million from the plastic bag ban and charging for their replacements. This is due to a sweetheart deal stores made with the legislature aimed at boosting their profits, not protecting the environment. <br /> <br />Prop 65 requires that the anticipated $300 million revenue from recyclable bag sales goes to protect the environment with projects like drought relief, beach clean-up and litter removal. It puts the California Wildlife Conservation Board in control of these funds for the benefit of Californians, rather than into the profit of stores taking advantage of the plastic bag ban. <br /> <br /><strong>Opponents&rsquo; Arguments Against: </strong> <br /> <br />Opponents of Prop 67 argue that it is a $300 million per year hidden tax increase on California consumers. They will be forced to pay at least 10 cents for every single use bag they get at checkout at stores, and none of that money goes to the state or the environment. Instead Prop 67 allows the stores to keep that money in their profits. A plastic bag ban should not be used as an excuse to profit from charging consumers for bags they used to get without charge. <br /> <br />Opponents of Prop 65 argue that it is just designed to confuse voters. They argue that the money from selling non-plastic single use bags is a drop in the bucket and will shrink over time as people make more use of reusable bags. They argue that the priority in this election is to approve the Prop 67 plastic bag ban and ignore the pointless Prop 65. <br /> <br /><strong>Discussion: </strong> <br /> <br />These initiatives are not as confusing many people think they look at first. Prop 67 bans plastic bags and allows stores to charge for other single use bags and pocket the money. Prop 65 says if we do ban plastic bags and allow stores to charge for other bags, that money has to go to an environmental fund, not be kept by the stores. <br /> <br />The plastic bag ban is the most important part of this pair of initiatives. The reality is that plastic bags are less than 1% of litter. Banning them won&rsquo;t have a significant impact on the environment. Banning one tiny part of all litter won&rsquo;t reduce litter, so litter clean-up will still have to be paid for. Educating the public, providing accessible garbage bins, and cleaning up will reduce litter. <br /> <br />Moreover, lightweight plastic bags are in general better for the environment than the alternatives. When you look at their whole life cycles&mdash;from the extraction of raw materials to final disposal&mdash;paper and reusable bags use more energy, water and other resources per bag than do lightweight plastic bags. Moreover, most people reuse the lightweight plastic bags they get at stores, mostly for trash disposal instead of buying new plastic bags with all of those environmental costs of manufacturing more plastics. On average each lightweight plastic bag is used 1.6 times while paper bags are typically used only once. <br /> <br />The kerfuffle over the prices charged by stores for alternative bags is relevant. On one hand creating a legal system for stores to charge for bags is a bit of a scam. But the fact is stores are not required to provide customers with free bags at checkout&mdash;ever been to Costco? They can charge for them if they want, but know that will turn customers to stores that don&rsquo;t charge for bags. Making the charge a requirement of state law is a great way to force consumers to pay for something that competition has kept as part of the overall service provided. Prop 65&rsquo;s requirement that the money go to an environmental fund at least brings a little honesty to the process. But the bottom line is that banning plastic bags does not make sense nor does forcing consumers to pay stores for bags they are willing to provide without charge.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014675@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 64: Marijuana Legalizationhttp://www.reason.org/news/show/california-proposition-64
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 64 legalizes possession and use of marijuana by adults 21 or older in California. State agencies are required to license and regulate the marijuana industry and put a sales tax on all marijuana sales except medical marijuana. Local governments may impose local sales taxes on marijuana as well. It imposes standards and restrictions on packaging, labeling and advertising of marijuana products and prohibits advertising directly to minors. It allows for people already convicted of marijuana offenses to be resentenced and have the conviction removed from their record. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />Additional tax revenues ranging from high hundreds of millions of dollars to over $1 billion annually, mostly dedicated to specific purposes. Reduced criminal justice costs of tens of millions of dollars annually. <br /> <br /><strong>Proponents&rsquo; Arguments For: </strong> <br /> <br />Proponents of Prop 64 argue that marijuana is available nearly everywhere in California, but in a dangerous black market. Prop 64 would create a safe, legal and comprehensive system for adult use of marijuana while protecting our children. It incorporates the lessons learned and best practices from states that already legalized marijuana and closely follows the recommendations of California&rsquo;s Blue Ribbon Commission on Marijuana Policy, which included law enforcement and public health experts. <br /> <br />They say under Prop 64 adults over 21 will be allowed to possess small amounts of nonmedical marijuana, and to grow small amounts at home for personal use. Sale of nonmedical marijuana will be legal only at highly regulated, licensed marijuana businesses and those under 21 are not even permitted to enter. Sales will not be allowed in bars, liquor stores, etc. Since drug dealers don&rsquo;t ask for proof of age when selling marijuana, Prop 64 will bring the same type of protections against underage purchases used for alcohol and tobacco. Additionally, it bans advertising directed at children, requires clear labeling and independent product safety testing, and does not allow marijuana businesses next to schools. <br /> <br />The Legislative Analyst's Office estimates that Prop 64 will both raise revenue and decrease costs. Sales taxes from marijuana will bring in over $1 billion of revenue every year, and it could save tens of millions of dollars in reduced law enforcement costs. Prop 64 will stop ruining people&rsquo;s lives over marijuana, ending the 8,800 annual felony arrests and prison sentences for growing or selling marijuana in California. <br /> <br />The revenue from sales taxes on marijuana don&rsquo;t go into a slush funds for politicians but must be spent on afterschool programs that help kids stay in school, job placement, job training, mental health treatment, drug prevention education for teens, treatment alcohol and drug addiction, and training and research for law enforcement to crack down on impaired driving. Over the next decade, these programs would receive billions in revenues. <br /> <br /><strong>Opponents&rsquo; Arguments Against: </strong> <br /> <br />Opponents of Prop 64 argue that the measure gets marijuana legalization wrong again. They make five key arguments against the measure: <br /> <br />1. It will increase highway fatalities. The AAA Foundation for Highway Safety reports that deaths in marijuana-related car crashes have doubled since the State of Washington approved legalization. Prop 64 does not include a DUI standard for marijuana. <br />2. Individuals are allowed to grow their own marijuana indoors&mdash;up to six plants, which is a lot&mdash;even if their house is next door to a school, playground or park. <br />3. Legalizing marijuana will increase black market and drug cartel activity. Organized crime has increased in Colorado since marijuana legalization. <br />4. While tobacco ads are banned from television, Prop 64 will allow marijuana smoking ads on prime time TV and other programs with children and teenage viewers. <br />5. Prop 64 does not limit the number of pot shops that can be opened in poor neighborhoods adding to their existing problems of alcohol and drug addiction. <br /> <br />They argue that Prop 64 is radically different from legalization measures in other states, and would repeal countless consumer protections just passed last year by the legislature. <br /> <br /><strong>Discussion: </strong> <br /> <br />Marijuana use is a personal decision that does not merit the current war against its use&mdash;a war that is an utter failure, since marijuana is readily available and ever cheaper in spite of it. That failed war costs approximately $8 billion in government expenditures nationwide each year. <br /> <br />It is not obvious that Prop 64 would make marijuana any more available than it already is, but it would certainly move the overwhelming majority of marijuana consumption into legal market or personal transactions. It is the black market, with its excess profits and violence that cause most of the problems associated with marijuana trade. A legal market removes most of the incentives for crime around marijuana use. <br /> <br />Applying sales taxes to marijuana has the virtue of putting it on the same footing as the buying and selling of other commodities. If Prop 64 passes, the legislature should cut other taxes, but that is unlikely to happen. <br /> <br />The taxes may incentivize a small remnant of a black market to avoid taxes, such as California has with cigarettes to avoid tobacco taxes. But by making it legal to grow your own, the incentive for a black market is even more diminished. Opponents&rsquo; assertion that black markets increase in a legalized market are unsubstantiated and frankly ludicrous. <br /> <br />Likewise, opponents&rsquo; arguments about DUIs are misleading to outright false. They complain that Prop 64 includes no DUI standard for marijuana, but this law is not the place for that. The legislature needs to establish rules for impairment similar to that for prescription drugs based on observed driving behavior and field sobriety tests evaluated by the court. Also, there is no evidence that legalizing marijuana has increased accidents or fatalities. Indeed, in Colorado traffic safety is close to an all-time best since marijuana legalization. We don&rsquo;t ban alcohol because of drunk driving, instead we try to stop drunk driving. The same approach is appropriate for marijuana as well.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014674@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 63: Background Checks for Ammunition Purchases and Large-Capacity Ammunition Magazine Ban http://www.reason.org/news/show/california-proposition-63
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 63 would require individuals to pass a background check and obtain a license from the Department of Justice in order to buy ammunition, and stipulates that most ammunition be sold by licensed vendors and reported to the Department of Justice. It requires lost or stolen firearms to be reported to law enforcement and prohibits persons convicted of stealing a firearm from ever possessing firearms. It would bans large capacity magazines in the state and require all current owners of them to dispose of them. It also requires law enforcement to search for and seize any firearm, wherever it may be in the state, owned by a person who commits a crime that would make them ineligible to purchase a new gun. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />Increased state and local court and law enforcement costs, potentially in the tens of millions of dollars annually, related to a new court process for removing firearms from prohibited persons after they are convicted. Potential increase in state costs, not likely to exceed the millions of dollars annually, related to regulating ammunition sales. These costs would likely be offset by fee revenues. Potential net increase in state and local correctional costs, not likely to exceed the low millions of dollars annually, related to changes in firearm and ammunition penalties. <br /> <br /><strong>Proponents&rsquo; Arguments For: </strong> <br /> <br />Proponents of Prop 63 argue that we need to stop gun violence&mdash;more than 300 Americans are shot each day, more than 80 of them fatally. Prop 63 will close loopholes to prevent dangerous criminals from obtaining and using deadly weapons. <br /> <br />Prop 63 removes illegal guns from our communities by taking requiring criminals to sell or transfer firearms they own. The Department of Justice identified more than 17,000 felons and other dangerous people with more than 34,000 guns, including more than 1,400 assault weapons. <br /> <br />Prop 63 keeps guns and ammo out of the wrong hands while protecting the rights of law-abiding Californians to own guns for self-defense, hunting and recreation. <br /> <br /><strong>Opponents&rsquo; Arguments Against: </strong> <br /> <br />Opponents argue that Prop 63 will burden law-abiding citizens without keeping violent criminals and terrorists from accessing firearms and ammunition.This is why it is overwhelmingly opposed by the law enforcement community who don&rsquo;t want to waste resources that could be better used effectively fighting crime. <br /> <br />Prop 63 opponents say the law won&rsquo;t work. It is incredibly complex and intrusive, putting huge demands on law enforcement to undertake activities not linked to responding to any crime. New York recently abandoned its enforcement of a similar proposal after it was passed, finding that it was impossible to implement and effectively maintain. Prop 63 would divert law enforcement resources for fighting criminals away from the real threat and toward criminalizing lawful gun ownership. <br /> <br /><strong>Discussion: </strong> <br /> <br />Prop 63 is clearly attempting to work around the failure to overturn the 2<sup>nd</sup> Amendment and require licenses to own a gun. Requiring a license to buy and own ammunition accomplishes that same thing, since a gun is unusable without it. Since the 2<sup>nd</sup> Amendment establishes the right to keep and bear arms, but does not mention ammunition, this is a workaround for gun control. It will certainly be challenged in court and will face a tough battle. Ammunition is necessary to make gun ownership a meaningful right. Could the law require a license for owning a firing pin and argue that people would still be able to own guns, albeit unable to fire, without a license? <br /> <br />At the same time Prop 63 is a very complex and comprehensive attempt to regulate gun ownership and use. It has 34 pages of details and that is where the devil lies. It has a massive section requiring law enforcement to identify and seize guns from people if convicted of a wide range of crimes, and in a number of instances even if mere evidence of a crime is found&mdash;before a trial and conviction occurs. Law enforcement groups can easily see this black hole of time and resources, and hence many of them oppose Prop 63. It also opens a 4<sup>th</sup> Amendment Pandora&rsquo;s box, because in order to find any weapon owned by a suspect, police will have to search anywhere it could be&mdash;which is just about anywhere. While legally conducting that search anything they find is chargeable so it is basically a warrantless search for evidence of as-yet-unknown crimes. <br /> <br />Advocates of gun control are so focused on their emotions about guns they consistently ignore the failure of these controls. The fact that New York tried a similar approach and gave it up as unworkable is simply ignored. Likewise, the fact that gun violence is not primarily a problem of legally owned guns and ammunition. The black market for guns in California is extensive, and a 2015 survey of federal prison inmates found that 90% said they obtained weapons illegally. <br /> <br />Prop 63 would clearly violate the 2<sup>nd</sup> Amendment right to keep and bear arms with a complex and unworkable nest of new regulations and mandates on law enforcement.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014673@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 62: Repeal of Death Penalty http://www.reason.org/news/show/california-proposition-62
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p><em>**Note** This measure is directly related to <a href="http://reason.org/news/show/california-proposition-66">Proposition 66</a>. If both are approved by a majority of voters, the one that receives the most &ldquo;yes&rdquo; votes will invalidate the other measure and be placed into law.</em> <br /> <br />This measure repeals the death penalty and makes the maximum punishment &ldquo;life without the possibility of parole.&rdquo; It retroactively applies to death row inmates. It requires persons sentenced to life without parole for murder to work while incarcerated and diverts a greater percentage of their wages to victim restitution. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />Net ongoing reduction in state and county costs related to murder trials, legal challenges to death sentences, and prisons of around $150 million annually within a few years. This estimate could be higher or lower by tens of millions of dollars, depending on various factors. <br /> <br /><strong>Proponents&rsquo; Arguments for: </strong> <br /> <br />Proponents of Prop 62 argue that the death penalty system has failed in California. The state has not executed anyone in 10 years due to problems with the system, the same problems that have plagued the system for 40 years and defied multiple attempts to fix it. It is time to admit it just doesn&rsquo;t work. <br /> <br />They argue that the justice system does make mistakes and the death penalty means a real risk of killing an innocent person. New technology and DNA testing have proven more than 150 people on death row nationwide innocent of the crimes for which they were sentenced to die. In California 66 people convicted of murder have been exonerated due to new evidence or methods showing they were innocent. Executing an innocent person is a mistake that can never be undone. <br /> <br />Surprisingly, it costs the state much more for each inmate sentenced to death than it does for one sentenced to life without parole. This is due to the extensive appeals process necessary in capital sentences. Since 1978 California has executed 13 inmates at a cost of over $5 billion&mdash;$384 million per execution. The state&rsquo;s independent Legislative Analyst confirmed Prop 62 will save $150 million per year. Resources can be better spent on education, public safety, and crime prevention that actually works. <br /> <br />Replacing the death penalty with a life sentence without parole ensures those convicted of the worst crimes will never be released and will do their time in regular prisons rather than expensive private death row cells. As well, Prop 62 requires these inmates to work while in prison, increasing restitution to their victims&rsquo; families. <br /> <br /><strong>Opponents&rsquo; Arguments Against: </strong> <br /> <br />Opponents of Prop 62 say that the worst murderers need to be put to death and not allowed to live out their lives, even in prison. The death penalty is not given to all murderers, only the worst&mdash;child killers, torturers, and cop killers. <br /> <br />They admit that California&rsquo;s death penalty system is broken but say we need to mend it, not end it. They say the justice system does not make mistakes with death penalty cases and there are no innocent inmates on California&rsquo;s death row. <br /> <br />They reject the argument that death sentence inmates wind up costing more than those serving life sentences and say taxpayers should not pay to feed, clothe, house, guard, and provide health care to brutal killers until they die of old age. They reject the Legislative Analyst&rsquo;s analysis that there will be cost savings from Prop 62 and argue that instead it will cost the state over $100 million. <br /> <br /><strong>Discussion: </strong> <br /> <br />Both sides admit California&rsquo;s death penalty system does not work. Very few people are sentenced to death in California, and those who are spend an average of 20 years on death row. In the last two decades, on average one person has been executed in California every 1.5 years. And the costs of holding death row inmates in special conditions all those years, with continuous legal counsel and so on, is substantially higher than keeping them in prison for life. <br /> <br />There is simply no good empirical evidence that the threat of a death penalty deters crime. The kind of people who do the extra heinous murders that lead to death sentences simply are not responding to incentives like the threat of a chance of being executed at some time in the future. <br /> <br />And the cost issue is not trivial. The Legislative Analyst&rsquo;s Office is very good at fiscal impact analysis, and it estimates the cost savings at around $150 million a year if Prop 62 switches California from the death penalty to life without parole. The costs to keep a death row inmate in prison have been rising rapidly. One of the fastest growing segments of the state budget has been prisons. The death penalty is part of that cost, providing little societal benefit for our spending and creating a less just, not more just, system in the process. <br /> <br />The large number of death row inmates exonerated thanks to new technology and DNA testing makes it very unlikely that there are no innocent people on death row in California or won&rsquo;t be in the future. The justice system is not perfect&mdash;no system can be. With a life sentence, there is at least a chance that a mistake can eventually be discovered and rectified. With the death sentence, once executed, the innocent are forever dead. If the justice system is in fact about justice and not vengeance, there can be no greater injustice than the state killing an innocent person. It is not reasonable to argue that life in prison without parole is not justice.In contrast, life in prison without parole is justice, and protects society without the risk of killing an innocent person.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014672@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 61: Drug Price Standardshttp://www.reason.org/news/show/california-proposition-61
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 61 would prohibit all state agencies from paying for any prescription drug for a price higher than the price negotiated by the U.S. Department of Veterans Affairs, with some exceptions already in federal law. It applies to any program where a state agency is the ultimate payer for the drug, even if not the direct buyer. MediCal managed care programs are exempt from this requirement. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />The fiscal impact of Prop 61 is very uncertain. The Legislative Analyst and the State Treasurer say it depends on how the measure&rsquo;s implementation challenges are addressed and the responses of drug manufacturers regarding the provision and pricing of their drugs. <br /> <br /><strong>Proponents&rsquo; Arguments For: </strong> <br /> <br />Proponents of Prop 61 argue that drug companies make enormous profits off of people&rsquo;s illnesses. Drug prices are skyrocketing and many crucial drugs are too expensive for the people who need them to afford. They say Prop 61 fights back against high drug prices. <br /> <br />The VA buys a lot of prescription drugs and negotiates prices with the drug companies that are 20% to 24% lower than prices for other government agencies. Prop 61 requires all state agencies to pay no more than the low price the VA negotiates. This will lower drug prices for everyone who gets drug benefits through California state agencies and will spill over to lower prices for all consumers. <br /> <br /><strong>Opponents&rsquo; Arguments Against: </strong> <br /> <br />Prop 61 opponents argue that by tying the prices California agencies pay for drugs to the price the VA pays, drug manufacturers will naturally just raise VA prices to keep the prices overall up where they want. It will not bring drug prices down for California agencies but will raise them for veterans. <br /> <br />Moreover, Prop 61 will reduce patients&rsquo; access to drugs. Drug manufacturers may simply stop offering drugs that they sell to the VA to agencies and individuals in California. They will continue to sell them to the VA and in other states at higher prices. <br /> <br />Prop 61 only applies to 12% of Californians, exempting most Medi-cal patients, privately insured patients, and Medicare patients. So there is not enough clout by that small number of patients to force drug prices down, increasing the chance those drugs just won&rsquo;t be offered to those patients any more. <br /> <br />Finally, Prop 61 creates more bureaucracy, red tape and lawsuits. It will costs California millions just to implement and may well lead to higher, rather than lower, drug prices for state agencies. <br /> <br /><strong>Discussion: </strong> <br /> <br />Prop 61 fails to understands how markets and pricing work and so will most likely lead to fewer drug options and higher prices for Californians&mdash;the very opposite of what proponents want to achieve. <br /> <br />If Prop 61 were put into place, a few things could happen. <br /> <br />The most likely outcome is that drug companies would raise the prices they charge the VA, since that would be the new price ceiling. This is what happened when Congress mandated that Medicaid pay no more than the VA negotiated prices, and soon thereafter Congress repealed the mandate. In other words, Congress tried the approach of Prop 61, it failed, and was eliminated. There is no reason to expect any different outcome from Prop 61. <br /> <br />Another scenario is that all state agencies could buy drugs at the lowest VA prices and save a lot of money. But, to make up for their shortfall, drug companies could raise prices on other drugs paid for by state agencies but not purchased by the VA. The end result might be no savings for California at all. Even worse, right now drug companies voluntarily give rebates to state agencies for drug purchases as part of negotiated prices, and such arrangements might violate Prop 61, again raising drug prices for Californians. <br /> <br />Finally, drug companies may not be willing to sell to all California agencies at the low prices negotiated by the VA. In which case state agencies might only be able to offer drugs from a few companies that agree to VA prices, or from companies that don&rsquo;t sell to the VA. But federal law requires MediCal to offer most approved drugs and so state agencies may have to ignore Prop 61 to comply with federal law. <br /> <br />All of these possible outcomes show the uncertain effects of Prop 61. State agencies and the VA do not buy drugs in a real market with traditional price negotiations, but are fraught with all manner of government rules and special dealing that would likely warp the intended effects of the Prop 61 mandate. Prop 61 proponents are optimistic that no negative outcomes will occur and the drug companies will meekly lower their prices. That is actually the least likely outcome.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014671@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 59: Overturn of Citizens United Act Advisory Question http://www.reason.org/news/show/california-proposition-59
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>In <em>Citizens United v. Federal Election Commission</em> (2010) the Supreme Court ruled that political contributions and spending were protected as &ldquo;free speech&rdquo; under the First Amendment. Prop 59 is a non-binding measure that encourages California members of Congress to exercise all of their constitutional authority to overturn that Supreme Court decision. Specifically, it would encourage the California congressional delegation to propose and ratify an amendment to the United States Constitution overturning the decision and stating that corporations should not have the same rights as human beings. Prop 59 is non-binding, which means that it does not actually overturn the Citizen United decision nor does it impose a penalty on legislators who do not comply. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />None <br /> <br /><strong>Proponents&rsquo; Arguments For: </strong> <br /> <br />Proponents of Prop 59 argue that corporations and billionaires should not be allowed to buy our elections, and the Citizen United decision allows them to do so. By giving corporations the same &ldquo;rights&rdquo; as human beings, it allows them to spend unlimited amounts of money on elections. Other decisions have overturned limitations on how much billionaires can spend on politics. <br /> <br />All California voters should have the same voice in politics, but corporate and billionaire political spending lets them influence election results and make it harder for other voices to be heard. The Supreme Court was wrong and must be corrected. Corporations aren&rsquo;t people and don&rsquo;t have rights. Voters should be able to set reasonable limits on political and campaign spending and contributions. <br /> <br />They say California voters have used ballot measures to instruct and improve state and local government before, and Prop 59 will tell Congress to pass an amendment to the Constitution to stop unfair political spending. <br /> <br /><strong>Opponents&rsquo; Arguments Against: </strong> <br /> <br />Opponents of Prop 59 argue that it is a big waste of taxpayers&rsquo; time and dollars. It does not stop any of the political spending the proponents complain about. Instead it is just a senseless, non-binding advisory measure furthering their campaign finance reform goals. Measures of non-binding nature do not belong on the ballot and clog the democratic process. <br /> <br />They say Prop 59 argues that free speech should not apply to the many thousands of small business owners and others who choose to incorporate. Indeed many churches, newspapers, television stations, Facebook, Google, Twitter, non-profits like Common Cause, League of Women Voters, and the ACLU are incorporated. All of these corporations are in fact composed of people who have as much right to free speech and political spending as any other voter. <br /> <br />Proposition 59 asks the California members of Congress to change the First Amendment of the United States Constitution. We should not ask this Congress to tinker with the First Amendment which guarantees and protects the right to practice religion, free speech, free press, peaceably assemble and associate with others, and petition the government. <br /> <br /><strong>Discussion: </strong> <br /> <br />This ballot measure does nothing to inform the California congressional coalition about the feelings of Californians about Citizens United that could not be accomplished with much less cost and bother by a good poll. <br /> <br />Constitutional matters should not be taken lightly or driven by anything other than a massive will of the American people. An attempt to overturn Citizens United by Congress would mean they could, at the same time, change any part of the First Amendment they desire. Given the controversies and conflicts between government and private individuals and organizations over free speech, religious freedom, and free press, the risks that Congress would attempt to further expand their power and limit individual rights is too great. <br /> <br />Moreover, Citizens United was a decision that gave free speech back to Americans. Campaign finance limits always sound good and are often popular, but they always wind up restricting the speech of some and not of others. For example, federal lawyers arguing against Citizens United before the Supreme Court said that they should be able to ban and confiscate any book that mentions a political candidate and is published during an election! <br /> <br />Meanwhile, all the fears of the evils of corporate and billionaire spending simply have not materialized. There have been three election cycles since the Citizens United ruling and what we have seen is:</p>
<p>&middot; For profit spending on campaigns has remained flat at 2-5% of total campaign spending and only a handful of for profit companies give to campaigns at all.</p>
<p>&middot; Spending not controlled by political campaigns, so called &ldquo;outside spending&rdquo;, such political spending by groups like the Humane Society, AFL-CIO, NRA, Environmental Defense, Chamber of Commerce, etc., is crucial so that politicians and political parties don&rsquo;t control the public discussion. But even that spending was just 13% of total political spending in 2014, while it was 17% in 2000, 10 years before Citizens United.</p>
<p>&middot; Overall political spending grew just 1.5% between 2006 and 2014. <br /> <br />Citizens United did not lead to an explosion in political spending by corporations and billionaires. It made political spending more competitive and freed up everyone to exercise their free speech rights on political issues.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014669@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 58: Non-English Languages Allowed in Public Education http://www.reason.org/news/show/california-proposition-58
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 58 is designed to repeal Prop 227, approved by voters in 1998, which requires teachers to teach &ldquo;limited English proficient&rdquo; (LEP) students primarily in English and reduce the amount of time students spend in special education classes. Prop 58 would still require schools to ensure English proficiency but lets them create various programs for doing so and provides parents the option to choose which English program their child enrolls in. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />No notable fiscal effect on school districts or state government <br /> <br /><strong>Proponents&rsquo; Arguments For: </strong> <br /> <br />Proponents of Prop 58 argue that there are no statistically significant data to show that Prop 227&rsquo;s immersion style of instruction produces better English proficiency than any other program, and that mandating a one-size-fits all approach is increasingly ineffective and out of touch with advances in teaching. Prop 58 gives flexibility back to schools, children and parents to try different approaches to reaching English proficiency and find the ones that work best for each child. <br /> <br />Prop 58 still requires schools to offer a structured English immersion program as one option for English learners. But it also removes barriers to multilingual education for English speakers, allowing more options for them to learn second languages. Students who learn a second language tend to do better academically overall and are more prepared for a globalized workplace. <br /> <br />This measure will require that local school officials submit plans detailing their programs and efforts to achieve English proficiency for all students in order to increase accountability. The current system has no accountability mechanism for local school officials. <br /> <br /><strong>Opponents&rsquo; Arguments Against: </strong> <br /> <br />Opponents argue that Prop 58 will repeal Prop 227, the &ldquo;English for the Children&rdquo; initiative that was overwhelmingly approved by California voters in 1998 and worked well immediately&mdash;within four years test scores of over a million immigrant students in California increased by 30%, 50%, or even 100%, and the number of Latinos scoring high enough to get into the University of California system shot up. <br /> <br />They say Prop 58 is a thinly veiled attempt to reinstate Spanish-only teaching in California schools. It repeals the requirement for English-only teaching in the schools. One section of Prop 58 allows the legislature to make future changes to English proficiency requirements and programs. This would allow the legislature to reestablish classes almost entirely in Spanish with a simple majority vote. Before Prop 227, &ldquo;bilingual education&rdquo; conducted mostly in Spanish was a failure, with many Latinos never learning how read, write or even speak English properly. Prop 58 opens the door for the legislature to roll California schools back to those failed approaches and prevent millions more Latino children from achieving English proficiency. <br /> <br /><strong>Discussion: </strong> <br /> <br />Before Prop 227, the bilingual education system in California was a disaster that utterly failed to help kids with limited English become proficient and catch up to other students in overall academic performance. But the changes imposed by Prop 227 don&rsquo;t seem to have helped. <br /> <br />The opponents of Prop 58 point to big gains by bilingual students in the years right after Prop 227 passed, but the problem is those gains both did not last and appear to be due to other factors. In 2016 English learners as a group scored low on state testing, with only 13% meeting English standards and 12% meeting math standards, not appreciably better than before Prop 227. Likewise the achievement gap for Hispanic students in California on the National Assessment of Education Progress NAEP dropped an almost insignificant amount from 35 in 1998 to 31 in 2015. <br /> <br />Those results reflect more than just the effects of English proficiency classes on student performance, but they do show that the mandated, single-approach English immersion classes of Prop 227 have not turned things around for English learning students. Meanwhile Stanford University and others have conducted experimental and longitudinal studies that find English-only immersion does not do any better than several other methods of teaching English, and tends to have only short-term results. San Francisco has made extensive use of high&ndash;quality, dual immersion programs, rather than English only, and has the highest state test scores for English learners. <br /> <br />Proposition 58 does give school districts a lot more flexibility to try different types of bilingual programs and it does add accountability to the state allows parents to make choices, which is lacking under the current system. A flexible but accountable approach, as Prop 58 provides, is what is needed. For example, charter schools seem to be doing the best job serving English learning students, especially in Los Angeles, likely because they have more flexibility to match kids with the English program that works best for them.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014668@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 56: Cigarette Tax to Fund Health Care, Tobacco Use Prevention, Research, and Law Enforcementhttp://www.reason.org/news/show/california-proposition-56
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 56 increases the cigarette tax by $2.00 per pack, with similar increases on other tobacco products and on electronic cigarettes containing nicotine. The revenue is allocated mainly to existing health care programs with some going to tobacco use prevention programs and tobacco-related research and law enforcement. This tax is exempted from providing some of its revenues for education spending as required by Prop 98. If tobacco use falls after this tax increase, the revenue from it will be redirected to backfill existing programs funded by earlier tobacco taxes. <br /> <br /><strong>Fiscal Impact: </strong> <br /> <br />In the first year, the tax would raise an additional $1 billion to $1.4 billion, which would likely taper off over time. <br /> <br /><strong>Proponents&rsquo; Arguments For: </strong> <br /> <br />Supporters of Prop 56 argue that tobacco-related health care costs Californians $3.5 billion annually and is the #1 preventable cause of death, killing 40,000 Californians annually. This is far in excess of what tobacco users themselves contribute to the health care system. Prop 56 will reduce smoking and help fund the health care costs of those who do, working like a user fee, paid for by those who benefit from it. Prop 56 is fair because you only pay if you use tobacco. <br /> <br />This year alone, an estimated 16,800 California youth will start smoking, one-third of whom will die from tobacco-related diseases. In every state that has significantly raised cigarette taxes, smoking rates have gone down. Prop 56 will help prevent thousands of young people from getting addicted to tobacco. <br /> <br />Prop 56 taxes electronic cigarettes too. Ninety percent of smokers start as teens, and teens who use e-cigarettes are twice as likely to start smoking traditional cigarettes. Taxing e-cigarettes just like tobacco products prevents our kids from getting hooked on this addictive, costly, deadly habit. <br /> <br />Finally, Prop 56 has built-in safeguards, audits and spending restrictions to ensure the money is spent on health care programs and not diverted by politicians for pet spending projects. <br /> <br /> <br /><strong>Opponents&rsquo; Arguments Against: </strong> <br /> <br />Opponents say Prop 56 robs California schools of funding. The state Constitution (through Proposition 98), requires that schools get at least 43% of any new tax increase, but Prop 56 exempts itself from this requirement, sending $600 million that should go to schools to health insurance companies and other wealthy special interests. None of this new tax will go to improve our kids&rsquo; schools, or to any of the other problems the state is struggling with, like crumbling roads, a drought, and violent crime. Sacramento and the budget should be focusing on those problems, not on smoking, which is already declining. <br /> <br />Opponents also argue that while everyone wants to help smokers quit, Prop 56 is a big tax hike that does very little to help smokers, allocating only 13% of the new money to smoking treatment and prevention. Indeed, by including a massive tax increase on vapor and e-cigarette products, which are much safer than smoking and overwhelmingly used by people to quit smoking tobacco, Prop 56 shows it does not care about smokers&rsquo; health. <br /> <br />Indeed, $147 million of the revenue is allowed to be spent on administration, a bureaucratic waste of money. Most of the new revenue (82%) goes to a brand new health care fund advocated by insurance companies and special interest groups to funnel the money to them. As much as $1 billion in funding from Prop 56 will go special interests for Medi-Cal services to patients they already treat. These special interests are not required to help any additional people, just line their own pockets. <br /> <br /> <br /><strong>Discussion: </strong> <br /> <br />The first problem with Proposition 56 is that it defies the voters&rsquo; will on education funding. Years ago Californians voted that a share of all new taxes must go to funding schools. If the legislature passed this tax, about $600 million for the revenue would go to schools. But like with so many new taxes these days, Prop 56 exempts itself from that requirement. Taxes will go up, but a smaller share of state revenue will go to schools, directly defying California voters&rsquo; desire that increases in state revenues include a significant share going to schools. <br /> <br />The second problem is that, while people love to tax others&mdash;especially those whose behavior they don&rsquo;t approve&mdash;and not themselves, the number of smokers is dwindling precipitously, limiting the money tobacco taxes can raise&mdash;the percentage of adults in California who smoke in fell by 51.1% between 1988 and 2014, from 23.7% to 11.6%. California already has the second lowest percentage of state residents who smoke among all 50 states. So Californians have been discouraged from smoking, this tax increase is much more about a money grab than it is about reducing smoking. And with ever fewer smokers to tax, does it make any sense to keep going back to that ever drier well to try to raise new revenue? <br /> <br />Third, Prop 56 supporters say it would provide $1 billion or more for funding Medi-Cal health services. But so often when every time we earmark a new tax to go to some part of state spending, legislators cut a commensurate amount of funds for that area and dump it in the general fund. Then they spend that money where they want to, not where voters do. So, merely directing where this funding goes does not increase the amount spent on health care. This bait and switch happens over and over. Past tobacco taxes failed to raise total state health care spending. Even past taxes and bonds dedicated to schools have failed to raise school budgets when legislators simply cut other school funding sources. <br /> <br />In this case it is even worse, because Prop 56 does not specify where and how most of the new tax money is to be spend on health care. Instead, that will be decided in legislative bargaining over each year&rsquo;s state budget. This means that the hospitals and insurance companies with the best lobbyists and most friends in the legislature will get the lion&rsquo;s share of the funds, while the poorest health care consumers won&rsquo;t even be at the bargaining table. <br /> <br />Finally, Prop 56 really shows it is all about the money and not about health by imposing a massive 320% tax hike on vaping and e-cigarette products. A recent report from the Royal College of Physicians concluded that vaping is &ldquo;at least 95 percent safer&rdquo; than smoking, that vape devices should be widely available and that doctors should encourage smokers to use them instead of smoking. Moreover, millions of people have already stopped smoking by using vape products. And where vape products are legally available, rates of cigarette smoking initiation have fallen faster than in locations where they are not available. Prop 56 will discourage one of the most effective means of reducing the harm of smoking.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014666@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 55: Tax Extension to Fund Education and Health Care http://www.reason.org/news/show/california-proposition-55
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>In 2012 California voters approved a temporary tax increase on those earning more than $250,000/year. Prop 55 would extend that tax increase another 12 years and divide the revenues between the K-12 education system, community colleges, and health care. <br /> <br /><strong>Fiscal Impact:</strong> <br /> <br />According to the Legislative Analyst&rsquo;s Office, continuing these tax increases would bring in between $4 billion and $9 billion each year depending on how the economy and stock market perform. About half of the money would fund K-12 schools and community colleges. The other half would be divided between health care spending and increased rainy day funds and debt payments. <br /> <br /><strong>Proponents&rsquo; Arguments For:</strong> <br /> <br />Supporters of Prop 55 argue that it will sustain education spending and the state budget simply by keeping existing tax rates on the rich. They argue that this tax only effects the wealthiest Californians who can most afford to pay it and need to pay their fair share and that Prop 55 <br /> <br />Prop 55 also requires audits and online posting of annual accounting to ensure that education funds go to schools and are used in classrooms and not on administrative costs and bureaucracy, allowing Californians to see exactly where the money goes. <br /> <br />Without Prop 55 schools would face up to $4 billion in funding cuts. During the recession 30,000 teachers were laid off, class sizes grew, and the cost of community colleges doubled. Supporters argue that Californians cannot go back to those days. Prop 55 will help fund the estimated 22,000 new teachers needed next year alone, help keep down the size of classes, help restore art and music classes that were cut during the recession, and help prevent community college tuition rate hikes. <br /> <br />Supporters contend that it also funds crucial health care programs, and healthier children are healthier students. Revenues from the tax will be leveraged to secure federal matching dollars for Medi-Cal as well. <br /> <br /><strong>Opponents&rsquo; Arguments Against:</strong> <br /> <br />Opponents of Prop 55 say the measure is a broken promise. In 2012, California voters were promised a <em>temporary </em>tax increase that was to phase out in 2017. They contend that special interests have resorted to literally going into the constitution to edit the dates and add 12 years to the tax hike reneging on the promise made to voters in 2012. <br /> <br />Opponents present the official title from the 2012 tax hike ballot measure: Prop 30: &rdquo;<em>temporary</em> taxes to fund education, guaranteed local public safety funding.&rdquo; and ask whether temporary means temporary or not. They point out that Governor Brown thinks so: &ldquo;that's a temporary tax and, to the extent that I have anything to do with it, will remain temporary&rdquo; he said when asked about plans to extend it. <br /> <br />Opponents of Prop 55 also argue that we don&rsquo;t need higher taxes. California&rsquo;s budget is finally balanced, and the state is increasing school spending, paying off debt and building up the rainy day fund. They assert that California is collecting excess tax revenue these days, as shown by the state budget recovering from a $16 billion deficit in 2012 to a $2.7 billion surplus in 2016. At the same time, education spending rose by $24.6 billion (a 52% increase), and Medi-Cal spending rose by $2.9 billion (a 13% increase). We don&rsquo;t need higher taxes to balance the budget and sustain funding. <br /> <br />Opponents say that people may think Prop 55 is aimed at the rich, but the tax brackets hit by higher taxes includes tens of thousands of small businesses who are the main ones creating jobs in California right now. Thousands of them left California after their taxes were increased in 2012. This new tax hike will only drive more small businesses out of state and kill countless more jobs. <br /> <br /><strong>Discussion:</strong> <br /> <br />After the 2012 tax hikes were approved by voters, the increased spending on education went almost entirely to make rapidly growing payments to the teachers&rsquo; pension plan, not to classrooms. With the growth in the state budget since then and the rise in education spending, the dire circumstances of the recession are simply not the case anymore. These high special taxes are not needed to adequately fund California education. But almost every election includes a ballot measure for taxes or bonds for schools. Reason pointed all of this out when Prop 30 was proposed in 2012 and predicted that it would not be &ldquo;temporary&rdquo; and it only took a few years to prove us right. <br /> <br />Without this tax hike, education funding will still be at least $20 billion higher than it was in 2012&mdash;a massive increase given that the student population shrank during that time. . A 52% increase in funding did not fix the massive problems California&rsquo;s education system faces, because the problems are not really lack of funds but lack of willingness to change how things are done. Those interested in California education should focus on fixing the system rather than throwing yet more money into the dysfunction. <br /> <br />Higher taxes have a big impact on jobs and job growth. This measure will deal a damaging blow to the California economy and freelance workers in particular. Since 2000, the United States has seen a drastic increase in sole proprietorships. These act as one-man, one-business entities so that small business owners and freelance workers can simply file one joint tax return that is both their business and personal income. They are indicative of a dynamic economy that is changing the way people earn income. By 2020, nearly 50% of the U.S. workforce will engage in some type of freelance work, with many of those full-time freelancers. They drive Uber in the morning, designs websites in the afternoon, and cater food at night, and then start their own business. Using a sole proprietorship means all the money earned working from separate sources or small businesses is stacked up and taxed as one personal income. These freelancers and small business owners are the not the &ldquo;elite 1%&rdquo; of the American economy; they are hardworking Americans who have trained for their marketable skills and earn themselves a good living as they moved up the income ladder. Prop 55 hits these people because their businesses are taxed as personal income, even though they are, by and large, not wealthy. <br /> <br />Small business owners who already arguably get taxed twice by the system (once in corporate tax and once in personal income tax) will now pay more in taxes as well. This means reductions in business expenditures which usually means cuts to payroll and jobs.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014665@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 54: Legislature. Legislation and Proceedings. AKA Public Display of Legislative Bills Prior to Vote.http://www.reason.org/news/show/california-proposition-54
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Prop 54 changes public access to the legislative process. First, new laws would have to be available in final form in both print and on the internet for at least 72 hours before being voted on by the full legislative house. Exceptions would be allowed for public emergencies, but that emergency must be declared by the governor, and even then waiving of the 72-hour rule must be approved by a 2/3 vote of the legislative house. Second, it requires the legislature to make audiovisual recordings of all proceedings and post them on the internet within 24 hours. It also allows any person to record legislative proceedings. While the proposition exempts closed sessions from these obligations, it imposes new transparency requirements for the reasons for closed sessions. Finally, it makes the official recordings public information and allows people to use the recordings of legislative proceedings for any legitimate purpose without paying any fees to the state. <br /> <br /><strong>Fiscal Impact</strong></p>
<p>The Legislative Analysist&rsquo;s Office estimates it would cost $1 million to $2 million to start up and approximately $1 million per year to meet these requirements. <br /> <br /><strong>Proponents&rsquo; Arguments For:</strong> <br /> <br />Proponents of Prop 54 argue that too many laws are rewritten at the last minute with neither legislators, nor the public nor the press having enough time to read the final version before it is voted on. They argue that Prop 54 will give everyone 72 hours to see the final language of legislation and to speak out on it if they desire, while allowing an exception for emergencies. <br /> <br />Prop 54 will stop the practice of &ldquo;gut and amend,&rdquo; in which, at the last minute, all the language of a bill can be completely replaced right before going to a vote, giving no opportunity for public input. This practice makes a mockery of democracy and gives the special interests in the legislature a massive advantage over citizens and activists who care about legislation by cutting them out of the debate. <br /> <br />Proponents argue that requiring audiovisual recordings of legislative proceedings will let everyone&mdash;not just the lobbyists who spend every day at the legislature&mdash;see the hearings, votes, and other activities of their legislature. And Prop 54 would ensure the videos are available for at least 20 years for the historical record. Allowing individuals to record open legislative meetings empowers the citizens and helps those who cannot attend. The councils and boards of 69 cities and 37 counties in California record their meetings and post them online; the legislature should catch up with the digital era. <br /> <br />Prop 54 also frees that video up to be used in any way by anyone. Current restrictions on video usage are a huge obstacle to government transparency. All legislative video should be available to all citizens for any purpose they desire so that the video is manipulated and interpreted by the people and is not filtered by censorship. <br /> <br />The costs of this transparency should be part of regular and sensible legislative operations and budget and require no new taxpayer money. <br /> <br /><strong>Opponents&rsquo; Arguments Against:</strong> <br /> <br />Opponents of Prop 54 argue that it complicates the legislative process for no good reason and would actually empower special interests more than the current system. <br /> <br />They say these new rules would slow down important bills like balanced budgets, the Fair Housing Act, and last year&rsquo;s bond measure to address the drought. If any change, no matter how slight, is made to a bill during the review period, it has to start all over again with another 72-hour wait. <br /> <br />Moreover, important bills like those might not even pass under the new rules because the 72-hour delay allows special interests more time to undermine the compromise in support of the bill. This would give special interests even more power than they already have. <br /> <br />Finally, one way California keeps a lid on political attack ads is by not allowing the use of legislative proceedings campaign ads. Prop 54 ends this restriction, allowing recordings of legislative proceedings to be mined for footage to use in distorted attack ads that will flood the airways every election. <br /> <br /><strong>Discussion:</strong> <br /> <br />The opponents essentially argue that the fewer people who know what is in a piece of legislation, the less likely it is that special interests will interfere with the goals of legislators. The proponents don&rsquo;t buy that and think the more people who know what is in legislation and can analyze and think about it, the less influence special interests will have over the process. <br /> <br />The latter argument is much more persuasive. The current process clearly gives the lobbyists, who are in the legislative offices and halls every day, far more influence. And last-minute language in legislation is such a common practice that often the press, public, and even voting legislators have no time to review and think about what a proposed law does. That is madness and fundamentally undemocratic. <br /> <br />Improving transparency of the legislative process is the first step to improving accountability. <br /> <br />Everyone should have a chance to know and respond to legislation before it is voted on. Everyone should have a chance to view the legislative process and activities, the debate, the discussion and the votes. <br /> <br />Yes, political attack ads are unpleasant. But they were nasty way before video was ever invented, and worries that video of legislative proceedings will fuel them pales in comparison to the benefits of citizens getting to see their legislators and legislature operate. And along with campaign ads, the recordings will also be available for media and research purposes, watchdog groups and many beneficial efforts. <br /> <br />The fact that hundreds of local governments and many other states post bills online before votes and make video of all their proceedings available show how easy and sensible it is. The costs of setting up and managing the system are really the costs of an open democracy.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014664@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)California's Proposition 53: Revenue Bonds. Infrastructure Projects. State Legislature and Voter Approval.http://www.reason.org/news/show/california-proposition-53
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>
<p>Currently voters must approve general obligation bonds, whereby the state borrows money by selling bonds that will be repaid with General Revenue tax funds. Prop 53 would go further, requiring voters to approve revenue bonds, whereby the state borrows for infrastructure projects by selling bonds that will be repaid with revenue from fees paid for tolls, water fees, transit fares, etc. if the total amount of the bonds is $2 billion or more. <br /> <br /><strong>Fiscal Impact:</strong> <br /> <br />This measure has no direct fiscal impact. <br /> <br /><strong>Proponents&rsquo; Arguments For:</strong> <br /> <br />Proponents of Prop 53 argue that currently most state bonds for infrastructure projects like water, sewers, schools or transportation require voter approval and that making an exception for revenue bonds allows the state to avoid a public vote on massive new debts. For example, they point to the bullet train project, originally promised not to cost California taxpayers any more than $10 billion but now carrying a price tag of at least $60 billion, and argue that voters should be able to improve funding for such a large cost increase. <br /> <br />They argue that Prop 53 will not stop local projects, but requires a vote only for state bonds and state funding of projects. It also will not restrict the University of California from selling bonds, stop needed transportation projects or prevent emergency projects in the wake of a natural disaster, because these are not typically funded with revenue bonds. <br /> <br />California has a massive $330 billion unsustainable debt that must be reined in. Voters want to scrutinize and approve massive new state debts, and closing the revenue bond loophole will give them that opportunity and authority. <br /> <br /><strong>Opponents&rsquo; Arguments Against:</strong> <br /> <br />Opponents of Prop 53 argue that it is a solution for a problem that does not exist but which will have a number of harmful effects. <br /> <br />They argue that it will erode local control of infrastructure projects by requiring a statewide vote for some local projects. If local governments and the state decide to team up and build a much-needed new bridge, school, or water storage project, Prop 53 might require everyone else in the state&mdash;who do not know or care about the project&mdash;to approve it. <br /> <br />They also argue that it does not have an exemption for emergencies or natural disasters that might make it harder to rebuild after an earthquake or flood. As well, the state and localities have a massive backlog of needed infrastructure projects that Prop 53 would make harder to complete. <br /> <br />Finally, revenue bonds don&rsquo;t put the state taxpayers at risk, but rather the buyers of the bond take the risk that the revenues to pay the debt will be sufficient. Users of the project essentially repay the debt through their fees that create the revenue for the bond. They argue that others who don&rsquo;t help pay those fees should not get to vote on the funding for it. <br /> <br /><strong>Discussion:</strong> <br /> <br />Prop 53 would not erode local control of projects. It only requires voter approval of state revenue bonds over $2 billion. It does not affect projects funded locally or with state funds other than revenue bonds. If there is need for a revenue bond over $2 billion for a project and they don&rsquo;t want a statewide vote, one of the local government entities can issue the bonds. But if the state&rsquo;s credit is being used to fund a local project it is not absurd that all state voters should approve that use of their collective debt even if on rare occasion that makes it harder to fund some projects. <br /> <br />Second, the issue of emergencies and disaster recovery is largely irrelevant. In those situations general state funds and general obligation bonds are used. Revenue bond projects are more complex and take more upfront planning to evaluate, fund and build than projects that do not charge user fees, so such projects are not typically funded with revenue bonds. <br /> <br />Revenue bonds that use the state&rsquo;s credit to fund local projects should be subject to the scrutiny of the state voters who bear the risk. Revenue bonds do affect the state&rsquo;s credit rating. They may appear to have no risk or cost to taxpayers, yet, knowing that ultimately the state taxpayers will cover the debt if the project falters, lenders set the interest costs very low compared to private sector loans. This makes them popular with state leaders and agencies, who use revenue-bond projects that run up even more debt, often with little transparency on the use of those funds. Because of this increased debt, revenue bonds put the state&rsquo;s credit, and taxpayers, on the hook for such projects. California already has a massive debt, pegged at an unsustainable figure somewhere between $340 billion to $778 billion, depending on which estimates are used. Profligate use of revenue bonds can just make that worse. <br /> <br />Also, there is a way to pay for infrastructure without putting the taxpayers, and thus the state&rsquo;s credit rating, at risk through increased debt. Well-designed public-private partnerships for new toll roads or water systems can be structured with private investors bearing all of the revenue risk.</p>
<p><a href="http://reason.org/news/show/2016-california-ballot-initiatives">Voter Guide:&nbsp;2016 California Ballot Initiatives</a></p>1014663@http://www.reason.orgMon, 17 Oct 2016 00:00:00 EDTadrian.moore@reason.org (Adrian Moore)Prop. 56 is another tax hike for special interestshttp://www.reason.org/news/show/prop-56-is-another-tax-hike-for-spe
The Bakersfield Californian <p>Another election, another attempt to use popular smoking taxes to funnel money to the well-connected in Sacramento. <br /> <br />Proposition 56 would increase the cigarette tax by $2 per pack, apply tobacco taxes to vaping and e-cigarette products, and would raise an estimated $1 billion to $1.4 billion per year, declining over time, purportedly to go to health care spending for low income Californians. <br /> <br />The first thing that jumps out about Proposition 56 is how it defies the voters&rsquo; will on education funding. Years ago Californians voted that a share of all new taxes must go to funding schools. If the legislature passed this tax, about $600 million for the revenue would go to schools. <br /> <br />But like with so many new taxes these days, Prop. 56 exempts itself from that requirement. Taxes will go up, but a smaller share of state revenue will go to schools. Brilliant. And in direct defiance of California voters&rsquo; desire that increases in state revenues include a significant share going to schools. <br /> <br />The second thing is that, while people love to tax others, and not themselves, and the ever dwindling number of smokers are an ever popular target, there is a limit to how far you go with this and still get any money out of it. <br /> <br />And a limit to the arguments that the higher taxes will reduce smoking and make us all better off. California already has the second lowest percentage of state residents who smoke among all 50 states. So, because so many Californians have been discouraged from smoking, this tax increase is much more about a money grab than it is about reducing smoking. <br /> <br />And with ever fewer smokers to tax, does it make any sense to keep going back to that ever dryer well to try to raise new revenue? <br /> <br />Finally, Prop. 56 supporters say it would provide $1 billion or more for funding Medi-Cal health services. But every time we earmark a new tax to go to some part of state spending, legislators cuts other funds for that area and spend them where they want to, not where voters do. <br /> <br />It happens over and over. Past tobacco taxes failed to raise total state health care spending. Even past taxes and bonds dedicated to schools have failed to raise school budgets when legislators simply cut other school funding sources. <br /> <br />In this case it is even worse, because Prop. 56 does not specify where and how most of the new tax money is to be spent on health care. Instead, that will be decided in legislative bargaining over each year&rsquo;s state budget. Which means that the hospitals and insurance companies with the best lobbyists and most friends in the legislature will get the lion&rsquo;s share of the funds. <br /> <br />How nice for them. The poorest health care consumers won&rsquo;t even be at the bargaining table. <br /> <br /><em>Adrian Moore is the vice president of the Reason Foundation.</em></p>1014718@http://www.reason.orgSun, 09 Oct 2016 10:00:00 EDTadrian.moore@reason.org (Adrian Moore)Testing a Better Way To Pay For Roadshttp://www.reason.org/news/show/testing-a-better-way-to-pay-for-roa
The Orange County Register <p>This month California launched a new &ldquo;Road Charge Pilot Program&rdquo; to test replacing the gas tax that drivers pay at the pump with a fee based on the number of miles they drive. <br /> <br />It&rsquo;s not the first transportation funding experiment of its kind. Other states including Oregon, Washington and Minnesota have already conducted similar tests in recent years, but it is important. Cars &ndash; and even trucks and SUVs &ndash; are getting more fuel efficient with each passing year. As fuel efficiency goes up, we drive as much or more while using less gas and thus paying less in gas taxes. <br /> <br />But there is still more wear and tear on roads, and inflation, labor, land and other rising costs make roads increasingly expensive to maintain and build. <br /> <br />Transportation should be funded through user fees &ndash; the people who pay to use roads should be the ones to pay for them. And the fees charged to use roads should go into dedicated accounts. Gas taxes, for example, should be spent on roads and shouldn&rsquo;t be treated as an income source that the state Legislature can divert to other purposes. As the gas tax becomes less viable as a user fee, we need a new user fee to replace it. <br /> <br />The Road Charge Pilot Program is designed to test mileage fees, which would replace gas taxes. The experiment already has over 5,000 volunteers from all over the state so it can measure how the system might work in all kinds of conditions. To implement a new reliable revenue stream for transportation, it&rsquo;s crucial that the state get this project right. <br /> <br />First, California needs to measure how to replace the gas tax with a mileage charge, not create a fancy way to tax everyone twice. The Road Usage Charge Program is explicitly mandated to replace the gas tax with a per-mile charge, but people are naturally suspicious it will wind up being a tax hike or open the door to double taxation through a gas tax and mileage fee. <br /> <br />Second, the system must protect drivers&rsquo; privacy. A per-mile charge cannot require that people be tracked by a state agency wherever they go. Nor can it be a mandate that the government put a &ldquo;black box&rdquo; in every car. The fee system has to provide individuals with choices about the technology they use. One driver may want GPS to track everything, while another driver may want to go to the DMV for annual odometer readings. Choice is key. <br /> <br />The system must also give drivers control over their data. Ideally the state will use private parties, separate from the government, that provide the technology and collect fees. Oregon has done a great job of this in its mileage charge system and California, so far, is adopting similar approaches. <br /> <br />Third, the experiment needs to explore how fair a per-mile charge is relative to gas taxes. We don&rsquo;t want a new system that shifts the burden of paying for the roads away from the people who use them. The good news is that previous mileage fee experiments indicate they are more fair than gas taxes. But it&rsquo;s important that rural and urban drivers, rich and poor, all believe the system is fair. <br /> <br />Fourth, the mileage fee can&rsquo;t spawn a new state collection bureaucracy or be overly expensive to collect. The gas tax has many failings, but one positive is that it is very inexpensive to collect. Mileage fee experiments thus far have been more expensive in this regard, so the state needs to explore ways to reduce collection costs, especially as the system scales up in the nation&rsquo;s most populous state. <br /> <br />California&rsquo;s new experiment is off to a good start. A well-functioning road system is essential to our lives, job prospects, state economy and mobility, so developing and implementing a sustainable method of funding the transportation system would be a major boost to the state. <br /> <br /><em>Adrian Moore is vice president of policy at Reason Foundation.</em></p>1014594@http://www.reason.orgFri, 05 Aug 2016 07:55:00 EDTadrian.moore@reason.org (Adrian Moore)Affordable Housing Mythshttp://www.reason.org/news/show/affordable-housing-myths
YourObserver.com <p>For the most part, the affordable housing discussion in Sarasota is increasingly sensible and productive. For example, in June the Tiger Bay Club hosted a panel discussion that was smart and interesting, and showed some real progress on grappling with barriers to more affordable housing. <br /> <br />But that forum also highlighted some of the myths about affordable housing I keep seeing pop up:</p>
<ol>
<li>Average salaries and average home prices in a city need to be aligned, and policymakers need to address the gap;</li>
<li>We can create affordable housing by mandating that developers sell some new units in every development at much lower prices.</li>
</ol>
<p>These myths are at best a distraction from tackling affordable housing, and at worst actually make housing more expensive. <br /> <br /><strong>Housing and labor markets are not the same market</strong> <br /> <br />I have repeatedly seen graphs showing that average salaries paid for many good jobs in Sarasota are not sufficient to pay average home prices in the area. Usually the graph is part of an argument that the region will have a hard time employing workers who can&rsquo;t afford to buy a home here. But let&rsquo;s break that issue down. <br /> <br />For starters, the market for labor and the market for housing are very, very different. Labor is very mobile, as people move to chase jobs or better pay all the time. Supply and demand for labor change a lot and rapidly with changes in the national, regional and local economy. Housing is not mobile, and supply and demand change much more slowly &mdash; especially supply. <br /> <br />If businesses have a hard time finding certain professional workers at the salary they are offering, they will raise salaries to attract the workers they need. Meanwhile, if demand for housing is high, developers will start working on new projects and eventually supply more housing. <br /> <br />The fact that salaries for so many jobs in Sarasota are less than that needed to afford to buy a house is a clear indication that a number of things are going on. Clearly enough workers are willing to come to Sarasota for that level of wages. And they are clearly able to find a place to live. People who can&rsquo;t afford to buy a home&mdash;or simply don&rsquo;t want to&mdash;rent one. There is nothing wrong with that and no reason to say everyone needs to be able to buy a home, especially early in their career. Finally, many people have a partner who also works, and the combined household income is enough to afford a home. Comparing average salaries to housing prices assumes only single-worker families are trying to buy homes, which is usually not true at the affordable housing level. <br /> <br />Put simply, the labor market in Sarasota is adjusting all the time, and fairly quickly. If we allow the housing supply to adjust too, even if slower, things will balance out. Especially if we let go of the strange notion that everyone needs to be able to buy a house, rather than embrace the idea that everyone needs to be able to find a good place to live. <br /> <br /><strong>Wealth vs. youth</strong> <br /> <br />A special version of the concern about Sarasota area incomes vs. housing prices is the concern about a &ldquo;brain drain&rdquo; of young people leaving Sarasota because they can&rsquo;t afford housing here, which surveys by the Sarasota Chamber of Commerce indicate is a real problem. <br /> <br />But this is a harsh reality of living in a place that is so desirable, especially to those with wealth. Wealthy, older individuals are competing with young workers for housing, and the wealthy can simply outbid them. As long as supply of housing is less than demand, the willingness of the wealthy to pay more will drive up housing prices. <br /> <br />Young people who want to live in Sarasota will have to be creative. Just like young people who want to live in Manhattan, they can&rsquo;t expect to live like the wealthy, many of whom are reaping the benefits of decades of hard work themselves. Renting, roommates, longer commutes, smaller housing, older fixer-uppers, etc. are all part of the mix. <br /> <br /><strong>Affordable housing mandates don&rsquo;t work</strong> <br /> <br />Too many people think we can just force builders to build housing and sell it at &ldquo;affordable&rdquo; prices. But the data from places that have done this show it results in fewer homes being built and raises average prices of homes. For example, in the Los Angeles region affordable housing mandates led to 770 affordable units being sold over seven years, while during the same period reducing the total number of new units built by more than 17,000 and raising the average home price by about $50,000. <br /> <br />Just think about it logically. In a market where homes are selling well, if a developer has to sell some units at below market prices, he will have to simply raise the price of the other units to pay the difference. That price hike means some people who could afford to buy a new home at market prices now cannot. So the mandate makes some people able to afford housing while making others unable to do so. <br /> <br />Worse, many developers just go to the next county to build, reducing the local supply of housing, again driving up average prices, and spreading regional housing over a broader area. It is a vicious spiral that makes housing less affordable, not more. <br /> <br /><strong>Stick to our knitting</strong> <br /> <br />The most important way to reduce the cost of housing in a region is allowing the supply of housing to keep up with demand. This does not mean new housing has to be cheap housing either, because cheap housing tends to be the older, smaller homes, freed up for young workers or lower income families when wealthier people move into new, higher-priced homes. That is how the housing market has worked in modern times, and too many people forget that and think the young and lower earners need to be able to buy new houses. <br /> <br />At the same time, the city and county governments need to work with developers who want to build affordable housing projects, especially rental units. Again, the historic reality of housing markets shows that this is where people entering the market, or having hard times, get their housing. Adequate supply that grows with demand is vital here as well to keep prices reasonable. <br /> <br />Finally, city and county governments need to ensure the regulatory process for new development flows smoothly. A well-functioning process for working with developers is crucial to allowing the supply of housing to keep up with demand and keeping prices in balance. <br /> <br /><em>Adrian Moore, Ph.D., is vice president of Reason Foundation, co-author of the book &ldquo;Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century,&rdquo; and lives in Sarasota.</em></p>1014591@http://www.reason.orgFri, 15 Jul 2016 11:40:00 EDTadrian.moore@reason.org (Adrian Moore)Paid Parking Is Our Friendhttp://www.reason.org/news/show/paid-parking-is-our-friend
YourObserver.com <p>As economists who study parking have advocated for years, the Sarasota Parking Advisory Committee, in its new Citywide Strategy for Parking Management report, has recommended paid parking for downtown Sarasota in addition to plans for paid parking and a new parking garage at St. Armands Circle. That would bring Sarasota on board with a trend going on in many cities. <br /> <br />Downtown, as well as Siesta Village and St. Armands Circle, suffer from a lack of parking spaces, and too many people blocking traffic trying to find spaces or waiting for one to open. Sarasota recognizes what so many other cities have found: As with most other goods, prices solve the problem of shortages and waiting in line to determine who gets a good spot. <br /> <br />Economists from Harvard to UCLA have pointed out for years that free parking has many hidden costs and causes congestion and problematic development patterns. The godfather of modern parking management, UCLA professor Don Shoup, wrote the book &ldquo;The High Cost of Free Parking&rdquo; and advises cities all over the world on how to improve parking. His recommendations boil down to:</p>
<ul>
<li>First, cities should charge the right price for curb parking, so that about 15% of spaces are vacant. That way, drivers will always be able to find one or two open curb spaces per block, and no one will cruise. We can call this the Goldilocks price. If no curb spaces are vacant, the price is too low, and if many spaces are vacant, the price is too high. If about 15% of the spaces are vacant, the price is just right. Parking is like gasoline: Cars use it, so drivers should pay for it.</li>
<li>Second, cities should return all the increased meter revenue to the metered districts. The parking revenues can pay to clean and repair the sidewalks, light the streets, remove graffiti, plant trees, provide security and put utility wires underground in the metered districts. These public improvements will attract even more customers, some of whom will walk from the surrounding neighborhoods.</li>
</ul>
<p>No one wants to pay for curb parking &mdash; that will never change &mdash; but if cities spend the revenue to pay for public services next to the parked cars, many people will begin to see the advantages of charging for curb parking. <br /> <br />I am delighted to see that city staff have built their recommendations for downtown parking on the foundation of Shoup&rsquo;s recommendations. A crucial addition developed in many tourist-heavy cities is to provide offsite parking that is significantly cheaper and shuttle service connecting it to downtown locations &mdash; an element the city staff proposal includes. <br /> <br />A similar service for Siesta Village and St. Armands Circle would be crucial as well, allowing those with more time but less money to park where there is more room and ride a shuttle to their destination. The many available free ride shuttles on Siesta Key would help make priced parking in the Village much more viable, and a similar service is already planned for downtown. <br /> <br />Right now the city spends about $500,000 a year from the general fund to subsidize parking. Paid parking is more efficient and fair, and provides a source of funding for downtown improvements &mdash; a big step up from the status quo.</p>
<p>Of course, the city needs to learn from the failed attempt in 2011 to implement parking meters downtown. The system needs to provide options for people to find spaces and pay for parking via a smartphone app and to easily and simply pay at the curb for those who are not so high-tech. Simple, easy-to-understand pricing with readily identifiable violations that makes for low-cost enforcement is ideal. <br /> <br />You don&rsquo;t have to look far to see this kind of approach. Cities all over Florida charge for parking. I recently went to a lunch meeting in downtown St. Petersburg and when I parked on the street I quickly read the sign, downloaded the app on my phone and paid for my parking. As I travel the country on business I have done the same many, many times. <br /> <br />But the leader in parking management these days is San Francisco. SFPark uses real-time technology and management to price parking variably, shifting as neighborhoods get busier or slower. That ensures there are always one or two spots available every couple of blocks so people won&rsquo;t block the streets looking for parking. And the price goes down when it is less busy to encourage people to come and park then. The money goes to improvements in the area, so merchants, shoppers, tourists and residents all see benefits from the parking fees. A recent study of SFPark by UC Santa Cruz found the parking program significantly reduced congestion. <br /> <br />Sarasota is very much on the right track with its proposed downtown paid parking plan. I encourage it to proceed and learn from the most successful efforts in other cities. I hope that it will also follow through on proposed parking pricing for St. Armands Circle, and that Sarasota County will explore how parking pricing can help Siesta Village. Paid parking can allow many more people to enjoy those places, patronize those businesses, and fund improvements to the priced neighborhoods that will benefit everyone. <br /> <br /><em>Adrian Moore is vice president at the Reason Foundation and lives in Sarasota.</em></p>1014592@http://www.reason.orgTue, 14 Jun 2016 10:05:00 EDTadrian.moore@reason.org (Adrian Moore)Pension Reform Newsletter - March 2016http://www.reason.org/news/show/pension-reform-newsletter-mar16
<p><a name="OLE_LINK3"></a><a name="OLE_LINK15"></a><a name="OLE_LINK2"></a><a name="OLE_LINK1"></a><em><em>This newsletter from Reason's Pension Integrity Project highlights articles, research, opinion, and other information related to public pension problems and reform efforts across the nation. You can find previous editions&nbsp;<a href="http://click.email.reason.org/?qs=cb32f1fea46cf01575ced9c63decf86103b77de206f7499bc71c898d99ce408e">here</a>.</em></em></p>
<p><a name="OLE_LINK8"></a><a name="OLE_LINK7"></a><strong>Articles, Research &amp; Spotlights&nbsp;</strong></p>
<ul>
<li>Arizona Enacts Groundbreaking Public Safety Pension Reform</li>
<li>A Collaborative Process for Pension Reform</li>
<li>Did Pension Reform Improve the Sustainability of Pension Plans?</li>
<li>Illinois Supreme Court Strikes Down Pension Law</li>
<li>Pension solution blooms in the desert</li>
<li>Governance-Based Solutions to Public-Pension Systems</li>
<li>Global Pensions Facing a Crisis</li>
<li>State Pensions Need More Transparency in Reporting Investment Returns</li>
<li>States Can Learn from Federal Experience in Pension Reform&nbsp;</li>
</ul>
<p><strong>Quotable Quotes on Pension Reform</strong></p>
<p><strong>Pension Reform Handbook</strong></p>
<p><strong>Contact the Pension Reform Help Desk </strong></p>
<p><strong>&nbsp; &nbsp; &nbsp;&nbsp;</strong></p>
<p><strong>Articles, Research &amp; Spotlights</strong></p>
<p><strong>Arizona Enacts Groundbreaking Public Safety Pension Reform<br /><em>By Leonard Gilroy, Pete Constant, and Anthony Randazzo, Reason Foundation</em></strong></p>
<p>&nbsp;</p>
<p>In February, Arizona policymakers <a href="http://reason.org/news/show/az-public-safety-pension-reform">approved comprehensive pension reform legislation</a> that will put the state's beleaguered public safety pension system on a path to financial solvency, reduce taxpayer exposure to financial risk, reduce long-term costs for employers and employees, and ensure retirement security for employees and retirees.</p>
<p>&nbsp;</p>
<p>Arguably more notable than the reform itself is the process used to achieve stakeholder consensus on the reform package, as it avoided the adversarial dynamic of pension reform policy debates that typically pit employers/taxpayers against employees and labor interests. The legislation garnered extensive support from public safety associations and many other stakeholders in the government and business community.</p>
<p>&nbsp;</p>
<p>Reason Foundation was a key player from the beginning of the process, with its Pension Integrity Project team providing education, policy options and actuarial analysis for all stakeholders. Reason also facilitated the development of consensus among stakeholders on the conceptual design and framework of the reform.</p>
<p>&nbsp;</p>
<p>For more details of the reform, see our full write up <a href="http://reason.org/news/show/az-public-safety-pension-reform">here</a>. For a more in-depth analysis of the fiscal components of the PSPRS reform, see our article on <a href="http://reason.org/news/show/az-pension-reform-fiscal-review">how the changes will improve the plan's solvency</a>.</p>
<p>&nbsp;</p>
<p><a name="14307d1cd3998348_Quotes"></a><strong>A Collaborative Process for Pension Reform<br /><em>By Pete Constant, Anthony Randazzo and Leonard Gilroy, Reason Foundation</em></strong></p>
<p>&nbsp;</p>
<p>At a time when differences of opinion regarding public policies are growing wider and partisanship is increasing rapidly, is there any hope for solving any of the vexing, complex issues of our time? Arizona&rsquo;s recent experience with the challenging issue of pension reform suggests that there is.&nbsp;</p>
<p>&nbsp;</p>
<p>Last month, Arizona Governor Doug Ducey <a href="http://reason.org/news/show/az-public-safety-pension-reform">signed comprehensive pension reform legislation</a>&nbsp;for public safety officers into law. This pension reform is notable not only for the <a href="http://reason.org/news/show/az-pension-reform-fiscal-review">positive fiscal impacts for taxpayers </a>and the sustainability it brings to the pension system, but also for the process used to craft the legislation and the widespread, broad bipartisan support it garnered along the way.</p>
<p>&nbsp;</p>
<p>Any hope of stakeholder consensus on a reform package depended on overcoming personal preconceived opinions and putting all potential reform scenarios on the negotiation table for discussion, analysis and vetting. The Pension Integrity Team&rsquo;s proposed general framework for the goals of pension reform helped stakeholders focus on whether a proposed plan change furthered the common goals.<br /> <br /> To read more about how different shareholders can be brought together for successful reform, go <a href="http://reason.org/news/show/a-collaborative-process-for-pension">here</a>.</p>
<p>&nbsp;</p>
<p><strong>Did Pension Reform Improve the Sustainability of Pension Plans?<br /></strong><em><strong>By Anthony Randazzo and Truong Bui, Reason Foundation</strong></em></p>
<p>&nbsp;</p>
<p>A fierce national debate is raging over whether closing public sector defined benefit plans to replace them with defined contribution plans improves the sustainability of retirement systems or creates further problems. We know what has actually transpired in states like Michigan and Alaska since their pension reform projects began, but until now there has been little robust forecasting of alternate scenarios against which to compare actual experience.</p>
<p>&nbsp;</p>
<p>In <a href="http://reason.org/news/show/counterfactual-pension-reform-analy">a new policy study</a>, Anthony Randazzo and Truong Bui at Reason Foundation examine what would happen if a state didn&rsquo;t close its defined benefit plan by applying a new actuarial model to the cases of Michigan&rsquo;s 1996 reform and Alaska&rsquo;s 2005 reform.</p>
<p>&nbsp;</p>
<p>They find that both states are better off specifically because they closed defined benefit plans compared to if they had made no changes. Unfunded liabilities have increased in both states since their reforms, but for reasons unrelated to the actual reforms: both states had underperforming investment returns, and both states failed to make 100% of their required employer contributions. Had Michigan and Alaska not closed their pension plans, unfunded liabilities would be even higher today than under actual experience. And had the states properly managed their pension reform projects they would be billions better off today.</p>
<p>&nbsp;</p>
<p>Read a summary of the policy study <a href="http://reason.org/news/show/counterfactual-pension-reform-analy">here</a>, and download the full study <a href="http://reason.org/files/ps450_pension_reform_sustainability_effects.pdf">here</a>.</p>
<p>&nbsp;</p>
<p>To read a related article confronting the major myths about closing defined benefits plans, go <a href="http://reason.org/news/show/closing-defined-benefit-plan-myths">here</a>.</p>
<p>&nbsp;&nbsp;</p>
<p><strong>Illinois Supreme Court Strikes Down Pension Law<br /></strong><em><strong>By Adam Crepelle, Reason Foundation</strong></em></p>
<p>&nbsp;</p>
<p>Last week, the Illinois Supreme Court <a href="http://www.illinoiscourts.gov/Opinions/SupremeCourt/2016/119618.pdf">ruled</a> that <a href="http://www.ilga.gov/legislation/publicacts/98/PDF/098-0641.pdf">Public Act 98-641 of 2014</a> violated the state constitution's pension protection clause which <a href="http://www.ilga.gov/commission/lrb/conent.htm">states</a>: "Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired."</p>
<p>&nbsp;</p>
<p>The Act tried to do three things. First, it increased employee contribution rates by 0.5 percent per year for five years, capping the contribution rates at 11 percent of the employee&rsquo;s salary. Second, it curtailed employee annual annuity increases. And, third, it increased the city's contributions to the pension system. The Act was also supported by 28 of the 31 represented unions.</p>
<p>&nbsp;</p>
<p>Though the reform increased the pension fund's financial stability, the court found that increased financial stability is not an offsetting benefit. According to the court, members gain nothing from the funding boost since they already have a constitutional right to receive their pension benefits under the state&rsquo;s pension protection clause.</p>
<p>&nbsp;</p>
<p>Read the full article <a href="http://reason.org/blog/show/illinois-supreme-court-strikes-down">here</a>.</p>
<p>&nbsp;</p>
<p><strong>Pension solution blooms in the desert<br /></strong><em><strong>By Leonard Gilroy and Pete Constant, Reason Foundation</strong></em></p>
<p>&nbsp;</p>
<p>New accounting standards are forcing California policymakers to confront the major financial risks inherent in public pension systems. At the same time, a recent overhaul of Arizona&rsquo;s statewide pension system for public safety workers shows how governments and unions focused on reducing such risk can produce a bipartisan consensus on reform.</p>
<p>&nbsp;</p>
<p>The routine releases of annual government financial statements are making big headlines this year because new accounting standards require unfunded pension liabilities to be reported on governmental balance sheets alongside traditional debt, not hidden as they&rsquo;ve been historically. This simple reporting change added $60.5 billion in pension debt to California&rsquo;s balance sheet. Orange County&rsquo;s liabilities jumped 275 percent, or $3.8 billion, over the prior year after factoring in previously obscured pension debt.</p>
<p>&nbsp;</p>
<p>The hope is that increased transparency will raise awareness of pension-related risks to taxpayers and inspire efforts to reform debt-ridden, financially unsustainable pension systems. Arizona&rsquo;s recent experience may offer reason for optimism.</p>
<p>&nbsp;</p>
<p>Read the full article <a href="http://reason.org/news/show/pension-solution-arizona">here</a>.</p>
<p>&nbsp;</p>
<p><strong>Governance-Based Solutions to Public-Pension Systems<br /></strong><em><strong>By Truong Bui, Reason Foundation</strong></em></p>
<p>&nbsp;</p>
<p><a href="http://www.manhattan-institute.org/sites/default/files/R-JCSM-0316.pdf">A recent study</a> by James Copland and Steven Malanga at the Manhattan Institute examines the substandard performance of public pensions and explores the role of pension-board governance in creating the outcome.</p>
<p>&nbsp;</p>
<p>The study finds that since 2000, public pension-plan funding in aggregate has declined from fully funded to 74 percent funded, with 63 percent of the plans less than 80 percent funded and 20 percent of the plans less than 40 percent funded. The aggregate funded status would drop, however, to 50 percent if a market-based discount rate were used. The unreasonably high rate of return assumptions do not only understate unfunded liabilities but also incentivize plans to take unwarranted investment risks to keep up with the rising implied risk premium. In fact, the percentage of public plans&rsquo; assets invested in cash and fixed-income investments has dropped from 47 percent in 1992 to less than 19 percent in 2015.</p>
<p>&nbsp;</p>
<p>Part of the problem is the lack of robust governance structures. Most public pension boards adhere to lenient standards of fiduciary duties, lacking in diversity and financial expertise. The majority of public pension boards are dominated by plan beneficiaries and elected officials. The study recommends improving board composition, adopting higher standards of fiduciary duties and other controls.</p>
<p>&nbsp;</p>
<p>To read the study, go <a href="http://www.manhattan-institute.org/sites/default/files/R-JCSM-0316.pdf">here</a>.</p>
<p>&nbsp;</p>
<p><strong>Global Pensions Facing a Crisis<br /></strong><em><strong>By Truong Bui, Reason Foundation</strong></em></p>
<p>&nbsp;</p>
<p>Citigroup recently released <a href="https://ir.citi.com/A44lKhe6CVSitfkypsON6kDXypHYjJ%2BENxq8FLMoTBde6kse9Kt9KQ%3D%3D">a new report</a> painting a bleak picture of the global pensions system. The report finds that both public and private pensions are faced with a crisis. According its estimates, the total unfunded liabilities of government pensions in twenty OECD countries are $78 trillion, almost double the $44 trillion official national debt. In other words, the total global government debt may be three times as large as what people think it is. Corporate pensions are also in trouble, with an aggregate funded ratio in the US of only 82%.</p>
<p>&nbsp;</p>
<p>The report notes the role of changing demographics, combined with optimistic economic and mortality assumptions in creating the crisis. Due to their long duration nature, pension liabilities&rsquo; valuations are highly sensitive to those assumptions. Lower than expected interest rates, higher than anticipated inflation, and longer than expected life expectancy all negatively affect the funded status.</p>
<p>&nbsp;</p>
<p>Among the report&rsquo;s recommendations for dealing with the crisis are more transparency in pension debt disclosure, raising the retirement age, utilizing collective defined contribution plans, and making full required contributions.</p>
<p>&nbsp;</p>
<p>Read the report <a href="https://ir.citi.com/A44lKhe6CVSitfkypsON6kDXypHYjJ%2BENxq8FLMoTBde6kse9Kt9KQ%3D%3D">here</a>.</p>
<p>&nbsp;</p>
<p><strong>State Pensions Need More Transparency in Reporting Investment Returns</strong><br /> <em><strong>By Truong Bui, Reason Foundation</strong></em></p>
<p>&nbsp;</p>
<p>While investment returns account for 60 percent of pension benefits, and investment fees can greatly affect the long-term costs of providing these benefits, state retirement systems differ widely in policies on disclosure of investment returns and transparency in reporting the costs of managing assets. This is <a href="http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2016/02/making-state-pension-investments-more-transparent">a recent finding</a> by the Pew Charitable Trusts, based on an examination of 73 largest state-sponsored pension funds.</p>
<p>&nbsp;</p>
<p>Pew shows that state pension funds have invested in an increasing share of alternative asset classes, such as private equity and hedge funds. These investments tend to carry higher fees due to their higher levels of risk, and those fees, especially carried interest, are treated differently across the plans studied.</p>
<p>&nbsp;</p>
<p>The ways state pension plans report their investment returns are also varied. While most of the state plans disclose their returns net of fees, a significant minority of those plans report only gross of fees returns. Some plans report 20-year investment performance and break it down by asset class while many plans do not. The lack of consistency and transparency make it difficult to evaluate those pension funds&rsquo; performances.</p>
<p>&nbsp;</p>
<p>To read the report&rsquo;s findings and recommendations in full, go <a href="http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2016/02/making-state-pension-investments-more-transparent">here</a>.&nbsp;</p>
<p>&nbsp;</p>
<p><strong>States Can Learn from Federal Experience in Pension Reform<br /></strong><em><strong>By Truong Bui, Reason Foundation</strong></em></p>
<p>&nbsp;</p>
<p>State&rsquo;s public policies often act as natural experiments to inform federal actions. In the case of pension reform, the situation is reverse. <a href="http://www.brookings.edu/~/media/Research/Files/Papers/2016/03/14-gale-papers/galeholmesjohn_CSRSandFERS_03092016_DP_BK.pdf?la=en">A recent paper</a> by the Brookings Institution examines the key aspects of the federal pension reform 30 years ago, and analyzes the similarity between the state&rsquo;s situations now and the federal government&rsquo;s in the 1980s.</p>
<p>&nbsp;</p>
<p>In 1986, Congress created the Federal Employees&rsquo; Retirement System (FERS) to replace the old Civil Service Retirement System (CSRS), a defined benefit plan. FERS has three components: Social Security benefits, a smaller defined benefit plan, and the Thrift Savings Plan (TSP), which operates like a 401(k).</p>
<p>&nbsp;</p>
<p>The paper shows that the issues faced by the states with underfunding problems today are quite similar to those faced by the federal government back then. Those issues include large unfunded liabilities, political controversy, Social Security coverage, expensive pension costs, and budgetary pressures. The paper identifies four key elements of the federal reform that states can model after:</p>
<ul>
<li>Leaving the existing workers in the old defined benefit plan</li>
<li>Create a new less costly defined benefit plan</li>
<li>Create a defined contribution plan with generous matching contributions</li>
<li>Enroll all workers in Social Security.&nbsp;</li>
</ul>
<p>To read the full paper, go <a href="http://www.brookings.edu/~/media/Research/Files/Papers/2016/03/14-gale-papers/galeholmesjohn_CSRSandFERS_03092016_DP_BK.pdf?la=en">here</a>.</p>
<p>&nbsp;<strong> &nbsp; &nbsp;&nbsp;</strong><strong>&nbsp;</strong></p>
<p><strong>Quotable Quotes on Pension Reform</strong></p>
<p>&ldquo;Under GASB&rsquo;s rules, a plan that takes more risk immediately reduces its (measured) liabilities and can contribute less. Under the more market-oriented rules governing U.S. corporate pensions or pensions in Canada, the U.K. or the Netherlands, the discount rate is fixed and taking more risk doesn&rsquo;t let plan sponsors lower contributions. So those plans don&rsquo;t have incentives to take excessive investment risk. GASB&rsquo;s rules, even the supposedly reformed Statements 67 and 68, facilitated what amounts to gambling by public sector pensions by effectively crediting plans with higher investment earnings before any of those earnings have actually taken plan. And we&rsquo;re not talking small amounts here. Public pension investments today are close to $3.5 trillion, according to Federal Reserve data.&rdquo;<br />- <a href="http://www.forbes.com/sites/andrewbiggs/2016/03/22/gasb-public-employee-pension-disclosures-arent-merely-insufficient-theyre-part-of-the-problem/2/#50aab3596a8f"><em>Andrew Biggs, resident scholar,&nbsp;</em><em>American Enterprise Institute</em></a></p>
<p>&nbsp;</p>
<p>&ldquo;I&rsquo;ve been involved in five divestments for our fund. [On] all five of them we&rsquo;ve lost money, and all five of them have not brought about social change.&rdquo;<br />- <a href="http://www.ocregister.com/articles/companies-703988-retirement-investment.html"><em>Christopher Ailman, Chief Investment Officer, California State Teachers Employees Retirement System</em></a></p>
<p>&nbsp;</p>
<p>&ldquo;One of the things that is perverse about pension accounting is that the convention is that the liabilities, that is, what the pension fund expects to pay out over time, are discounted at the same rate as the assumed returns. However, for a government pension plan, where taxpayers are on the hook for any shortfalls, the risk of CalPERS beneficiaries getting their money is not the risk measured in terms of what CalPERS projects in terms of future employee contributions, expected returns, and expected payouts; it&rsquo;s ultimately California state risk, which means the liabilities should be discounted at California&rsquo;s long term borrowing rate. With California rated S&amp;P AA3, Moody&rsquo;s Aa-, and 20 year AA muni yields 2.75% and A at 3%, no matter how you look at it, the discount rate on the liability side is indefensibly high.&rdquo;<br />- <a href="http://www.nakedcapitalism.com/2016/02/more-evidence-that-the-calpers-board-and-staff-do-not-understand-finance.html"><em>Susan Webber (&ldquo;Yves Smith&rdquo;), President, Aurora Advisors Incorporated</em></a></p>
<p>&nbsp;</p>
<p>&ldquo;Today's pension crisis is due to policy decisions made years ago by legislative bodies that created unsustainable systems, lulled by years of a bull market into thinking they could increase benefits based on unrealistic and risky market expectations. But bull markets don't last forever. When the bottom falls out, taxpayers are left to pick up the shortfall&rdquo;<br />- <a href="http://www.governing.com/gov-institute/voices/col-consensus-public-pension-reform.html"><em>Chuck Reed, former mayor of San Jose; and Dan Liljenquist, former Utah state senator</em></a></p>
<p>&nbsp;</p>
<p>&ldquo;We project unfunded pension liabilities on a reported basis will grow by at least 10% in fiscal 2016 under even our most optimistic return scenario&rdquo;<br />- <a href="http://www.pionline.com/article/20160317/ONLINE/160319881/moodys-low-returns-skyrocketing-public-pension-fund-liabilities"><em>Thomas Aaron, analyst, Moody&rsquo;s Investors Service</em></a></p>
<p>&nbsp;</p>
<p>"Millions of Americans&mdash;including state and local workers, retirees, and taxpayers&mdash;have a stake in the financial health of these plans. Ensuring that relevant, useful information is readily available about the assets and obligations of state and local pension plans is in the public's best interest. And while making more information available is important, it is also important that the purpose of disclosed information be clear to the intended audience.&rdquo;<br />- <a href="http://www.prnewswire.com/news-releases/actuaries-welcome-discussion-of-meaningful-disclosures-for-public-employee-pension-plans-300240560.html"><em>Tom Wildsmith, President, American Academy of Actuaries</em></a></p>
<p>&nbsp;<strong> &nbsp; &nbsp;&nbsp;</strong>&nbsp;</p>
<p><strong>Pension Reform Handbook</strong></p>
<p>For those interested in the process and mechanics of pension reform, Reason Foundation published a <a href="http://reason.org/news/show/pension-reform-handbook-a-starter-g">comprehensive starter guide</a> for state and local reformers. This handbook aims to capture the experience of policymakers in those jurisdictions that have paved the way for substantive reform, and bring together the best practices that have emerged from their reform efforts, as well as the important lessons learned.</p>
<p>To access the handbook, go <a href="http://reason.org/news/show/pension-reform-handbook-a-starter-g">here</a>.</p>
<p>&nbsp;</p>
<p><a name="14307d1cd3998348_Contact"></a><strong>Contact</strong><strong>&nbsp;</strong><strong>the Pension Reform Help Desk</strong></p>
<p>Reason Foundation set up a Pension Reform Help Desk to provide information on Reason's work on pension reform and resources for those wishing to pursue pension reform in their states, counties, and cities. Feel free to contact the Reason Pension Reform Help Desk by e-mail at&nbsp;<a href="mailto:pensionhelpdesk&#64;reason.org">pensionhelpdesk&#64;reason.org</a>.</p>
<p>***</p>
<p><a name="OLE_LINK17"></a><a name="OLE_LINK16"></a><em>Follow the discussion on pensions and other governmental reforms at&nbsp;</em><a href="http://click.email.reason.org/?qs=83556dccf6e2df5399fed654e27351deb246d3b0b886988bf38e19b7254a7fde"><em>Reason Foundation's website</em></a><em>or on&nbsp;</em><a href="http://click.email.reason.org/?qs=83556dccf6e2df5331e22822953eeecac8fe650160149537591942b8cb7cfc6e"><em>Twitter &#64;ReasonReform</em></a><em>. As we continually strive to improve the publication, please feel free to send your questions, comments and suggestions to&nbsp;</em><a href="mailto:adrian.moore&#64;reason.org"><em>adrian.moore&#64;reason.org</em></a><em>.</em></p>
<p>&nbsp;</p>
<p><strong><em>Adrian Moore<br /></em></strong><strong><em>Vice President, Policy<br /></em></strong><strong><em>Reason Foundation</em></strong></p>1014514@http://www.reason.orgTue, 12 Apr 2016 11:26:00 EDTadrian.moore@reason.org (Adrian Moore)Taxpayers Need to Derail Bullet-Train Debaclehttp://www.reason.org/news/show/taxpayers-need-to-derail-bullet-tra
The Orange County Register <p>California&rsquo;s high-speed rail project has been an unprecedented string of bait-and-switch tactics. Yet, the latest switcheroo still managed to be mind-boggling. The California High-Speed Rail Authority wants to shift directions entirely, and now proposes building the line from Bakersfield to San Jose first, instead of starting with the section running from Merced to Los Angeles, as originally promised. <br /> <br />First, when an infrastructure project of this size, scope and cost completely changes courses and construction plans years into the process like this, it reveals massive mismanagement. Second, the prospect of people whizzing between Fresno and San Jose really screams &ldquo;the transportation technology of the future,&rdquo; doesn&rsquo;t it? <br /> <br />When this train project was first proposed, it was supposed to be about providing a high-speed alternative to flying and driving between two of the nation&rsquo;s largest urban areas &ndash; San Francisco and Los Angeles. To make the original numbers work, high-speed rail advocates claimed California would build a bullet train on-time and on-budget; the system would have higher ridership than any bullet train in the world; it would be more efficient than any high-speed train in the world; it would have lower ticket prices than any bullet train in the world; and it would go faster than any train in the world. <br /> <br />California voters bought enough of that sales pitch to pass a $10 billion bond initiative in 2008. Voters were told that, if they approved that bond money, the private sector and/or federal government would pay for the rest of the train system. But that other money hasn&rsquo;t shown up, so the California Legislature approved using cap-and-trade revenue, intended to combat global warming, to fund the train project, instead. That money comes from businesses, which just pass along those carbon-cutting cap-and-trade costs to their customers &ndash; you guessed it, California taxpayers. <br /> <br />Yet, the cap-and-trade money still won&rsquo;t be enough. The state&rsquo;s 2008 cost estimate of $40 billion to build the entire system has exploded. Now, the Rail Authority has increased its estimate to $64 billion. In reality, the complete high-speed route from Los Angeles to San Francisco that voters were originally promised would likely cost more than $100 billion. <br /> <br />Congress continues to say it will not provide any funding for the project. And the private sector is not investing in a train project that shows no signs of ever being profitable and is such an obvious planning crisis that the Rail Authority has been forced to start admitting a few of its many errors. It acknowledges that tunneling through the Tehachapi mountains and building elevated tracks from Lancaster to San Fernando will cost much, much more than they predicted. <br /> <br />And that trip from Los Angeles to San Francisco that was supposed to zoom by in 2 hours, 40 minutes won&rsquo;t happen. Trains will be required to run at lower, safer speeds through populated parts of Los Angeles, San Fernando Valley and Silicon Valley, which will likely push a one-way train trip well over three hours. Flight time from Los Angeles to San Francisco is under an hour. <br /> <br />Thus, even including travel time to the airport and time spent in security lines, flying will continue to be the faster option for most people, and driving will be very competitive time-wise, not to mention much cheaper. <br /> <br />But sadly, the California High-Speed Rail Authority remains determined to fleece taxpayers. It continues to shift plans on a whim and aims to spend all of the taxpayer money it has received to date &ndash; around $13 billion. Instead of admitting the project&rsquo;s fatal flaws and closing shop, the state seems committed to laying whatever track it can between the Central Valley and San Jose. When it runs out of money &ndash; which it will, quickly &ndash; we&rsquo;ll surely hear claims along the lines of &ldquo;now that we&rsquo;ve started this project, we can&rsquo;t turn back now.&rdquo; <br /> <br />Since the Rail Authority won&rsquo;t do the right thing and close this epic failure, taxpayers are going to have to make it clear to state leaders: this train isn&rsquo;t getting another cent of money from us. <br /><br /> <em>Adrian Moore is vice president of policy at Reason Foundation.</em></p>1014602@http://www.reason.orgFri, 18 Mar 2016 11:30:00 EDTadrian.moore@reason.org (Adrian Moore)Urban Containment: The Social and Economic Consequences of Limiting Housing and Travel Optionshttp://www.reason.org/news/show/urban-containment-the-social-travel
<p>Responding to a growing interest in curtailing carbon emissions, some cities are limiting their urban footprint&mdash;a practice called &ldquo;urban containment.&rdquo; Urban containment policy seeks to control &ldquo;urban sprawl&rdquo; and to reduce GHG emissions by densifying urban areas and substituting transit, cycling and walking for car and other light duty vehicle use. This study evaluates four urban containment reports&mdash;by the U.S. Department of Energy, the Transportation Research Board (Driving and the Built Environment), the Urban Land Institute (Moving Cooler) and the U.S. Environmental Protection Agency&mdash;to determine their cost-effectiveness in reducing greenhouse gas (GHG) emissions and their impact on household affluence and the poverty rate.</p>
<p><strong>Urban Containment and Cities</strong></p>
<p>Cities have experienced declining population densities for centuries. This occurred as urban areas expanded at a greater rate than population, due in large measure to improved transportation technologies, as walking was substantially replaced by transit and later, transit was substantially replaced by cars. Even in the densest parts of urban areas&mdash;the core municipalities&mdash;population densities have declined virtually around the world.<br />The physical expansion of cities, known as &ldquo;urban sprawl,&rdquo; has been a principal concern of urban planners for decades, which has led to the adoption of &ldquo;urban containment.&rdquo; The most important urban containment policies are restrictions on urban fringe development&mdash; by means of urban growth boundaries or similar land-rationing measures&mdash;and policies to reduce light duty vehicle use.</p>
<p>Concern about GHG emissions drives an increasing emphasis on urban containment policy. This is based on the assumption that higher densities and less car use would translate into materially lower GHG emissions. In effect, urban containment policy seeks to replace the more liberal land-use policies that have been typical in U.S. metropolitan areas since World War II.</p>
<p><strong>Urban Containment and Greenhouse Gas&nbsp;Emissions</strong></p>
<p>The DOE report, which reviews other reports, indicates that urban containment policies &ldquo;have significant potential to impact ... GHG emissions significantly over the long term.&rdquo; The DOE report provides an overview of urban containment policy and summarizes GHG emissions reduction projections from previous research. The two most important reports reviewed&mdash; Driving and the Built Environment and Moving Cooler&mdash;indicate that urban containment policies could reduce 2050 greenhouse gas emissions from light duty vehicles by 1% to more than 10%. The later EPA report projected 2050 GHG emissions reductions at 4.3%.</p>
<p>These projections raise several issues for analysis:</p>
<ul>
<li>Driving and the Built Environment itself raises doubts about the political feasibility of implementing the policies the reports deem &ldquo;necessary&rdquo; to reduce GHG emissions.</li>
<li>Moving Cooler was strongly criticized by a sponsor, AASHTO (American Association of State Highway and Transportation Officials), which withdrew from the project indicating that the conclusions were based on &ldquo;assumptions that are not plausible&rdquo; and that the report &ldquo;did not produce results upon which decision-makers can rely.&rdquo;</li>
<li>Recent analysis casts further doubt on the potential for urban containment to reduce GHG emissions.</li>
<li>Comprehensive research at the University of California questions the robustness of the association between strategies to increase population densities and reducing GHG emissions.</li>
</ul>
<p>In response to these uncertainties, this analysis examines and evaluates the range of projections from both Driving and the Built Environment (range minimum) and the EPA report (range maximum). This study finds that the overwhelming share of GHG emissions reduction projected in each of the reports is caused by fuel economy improvements from the base years that are assumed in the modeling, not urban containment policy. Since fuel economy is likely to continue to improve, even greater GHG emission reductions are likely in the near future. Moreover, this study contends that additional GHG emissions from the increased traffic congestion likely to be produced by the denser environments created by<br />urban containment policies could materially mitigate or even overwhelm the projected GHG emissions reductions projected in the reports.</p>
<p>Finally, this study cautions that the use of long-term projections based on anticipated human behavioral changes is inherently unreliable, suggesting substantial margins of error. Moreover, the projected GHG emissions from urban containment policy are so small that they could be offset by projection errors and unreliability.</p>
<p><strong>Urban Containment and Mobility</strong></p>
<p>Economic growth in metropolitan areas is strongly associated with higher levels of mobility. Metropolitan areas are labor markets. If employees are able to access a larger percentage of jobs in a fixed period of time (such as 30 minutes), the economic productivity of the metropolitan area is likely to be greater.<br />U.S. metropolitan areas rely principally on light duty vehicles for personal mobility. Transit access is very limited. On average, only 6% of jobs in major metropolitan areas can be reached on transit in 45 minutes by the average employee. In contrast, nearly two-thirds of jobs can be reached by light duty vehicle in that same time frame.</p>
<p>Low transit use not only reflects reachability of employment but also quality of transportation mode. While transit works for some point-to-point downtown commuters, it is less effective for other trips, including non-work travel, which makes up nearly 85% of trips. This is because light duty vehicles offer a vastly speedier, less burdensome mode of transportation for all manner of non-commute trips, such as parents transporting children or pets, equipment or large or heavy items, groceries in need of refrigeration/freezing, or &ldquo;trip-chaining&rdquo; several errands.</p>
<p>Higher densities are strongly associated with increased traffic congestion. This not only impedes personal mobility but is also a concern with respect to commercial traffic and build-upsiness costs. Texas A&amp;M Transportation Institute data indicate a strong relationship between limiting the expansion of roadways and greater traffic congestion over the last three decades.</p>
<p>By favoring modes of transport (transit, cycling and walking) that cannot equal the mobility provided by light duty vehicles, urban containment could retard the productivity of metropolitan areas and significantly degrade people&rsquo;s everyday lives, leading to a lower standard of living and greater poverty.</p>
<p><strong>Urban Containment and Housing Affordability</strong></p>
<p>For much of the period since World War II, there has been comparatively little variation in house prices relative to household incomes around the country. However significant differences have arisen in more recent decades, in some places more than in others, and especially in dense, urban areas.<br />Economic theory indicates that limits on supply tend to increase prices, all things being equal, regardless of the good or service (including land for housing).</p>
<p>This potential association is largely dismissed by urban containment advocates and the DOE report, yet a considerable body of research confirms the economic theory that limiting the supply of a good (land) upsets the ratios between demand and supply, leading to higher prices (houses). The fundamental difficulty is that the &ldquo;competitive supply of land&rdquo; identified by economist Anthony Downs is not maintained.</p>
<p>This study finds the expected correlation between higher house prices and limited land supply confirmed by the research. As early as 1973, British researchers were associating higher house prices with urban containment and especially noting negative effects on low- income households. A number of researchers have identified similar results across the United States and internationally. A study by the Tomas Rivera Institute in California expressed concern about the negative impacts on Hispanic and African American households.</p>
<p>A detailed examination by Dartmouth economist William Fischel identified the land use regulatory structure as the principal reason for California&rsquo;s extraordinary house price increases. An examination of housing affordability in Portland shows substantial price increases since the research cited in the DOE report, and particularly large increases in housing costs in high-density and low-income core areas. Housing is generally a household&rsquo;s largest expenditure item, thus the variation in housing costs between metropolitan areas has a greater impact than that of other expenditure items. Therefore the higher house prices relative to incomes that are associated with urban containment reduce household discretionary income, leading to a lower standard of living and higher poverty rates.</p>
<p><strong>Urban Containment and GHG Emission Reduction Costs</strong></p>
<p>It is necessary to minimize the costs of any level of GHG emissions reductions to preserve economic growth and the standard of living. The normal metric for evaluating the cost of GHG emissions reduction is the cost per metric ton of carbon dioxide equivalent. Cost varies significantly between economic sectors, and it is important to select the most cost- effective strategies, regardless of economic sector. &ldquo;Across-the-board&rdquo; reductions can lead&nbsp;to more-costly and less-effective strategies being implemented, which could threaten economic growth.</p>
<p>The cost per metric ton of carbon dioxide equivalent emissions from urban containment policy is hundreds to thousands of times the cost of reducing emissions in the power sector. There are thus vastly more cost-effective alternatives to urban containment policy for reducing GHG emissions. Research by both the Congressional Budget Office and Resources for the Future found that sufficient GHG emission reductions can be achieved without reducing driving or living in denser housing.</p>
<p><strong>Urban Containment and the Broader Economy</strong></p>
<p>There are broader consequences to urban containment policy. Research has associated urban containment policy with slower metropolitan area employment growth and slower economic growth. Further, during the last decade there was a pronounced net domestic migration toward lower cost housing metropolitan areas from higher cost areas. With their restrictions on development outside the urban footprint, urban containment policies effectively trap people and businesses into higher cost areas, with unintended consequences for the broader economy.</p>
<p><strong>Urban Containment and the Standard of Living</strong></p>
<p>The United States has the most affluent metropolitan areas in the world, despite their low density. International data indicate that, compared to other nations, traffic congestion in the United States is less intense and average work trip travel times are better, indicating a higher level of mobility. International data also indicate that housing is generally more affordable relative to incomes than in other nations.</p>
<p>Implementation of urban containment policies will likely lead to more-congested cities and less mobility, as well as lower discretionary incomes as house prices rise relative to incomes. The result would be a lower standard of living and greater poverty.</p>
<p>Sufficient GHG emissions reductions can be achieved without urban containment policy and its attendant economic problems. The key is focusing on the most cost-effective strategies, without unnecessarily interfering with the dynamics that have produced the nation&rsquo;s affluence.</p>1014479@http://www.reason.orgMon, 07 Mar 2016 00:00:00 ESTinfo@reason.org (Wendell Cox)Pension Reform Newsletter - February 2016http://www.reason.org/news/show/pension-reform-newsletter-feb16
<p><em>This newsletter from Reason's Pension Integrity Project highlights articles, research, opinion, and other information related to public pension problems and reform efforts across the nation. You can find previous editions <a href="http://click.email.reason.org/?qs=cb32f1fea46cf01575ced9c63decf86103b77de206f7499bc71c898d99ce408e">here</a>.&nbsp;</em>&nbsp;</p>
<p><strong>Articles, Research &amp; Spotlights&nbsp;</strong></p>
<ul>
<li>How Will GASB 68 Affect Cities' Reported Funded Status?&nbsp;</li>
<li>An Examination of Connecticut State Employees Retirement System</li>
<li>State and Local Government Pensions: Problems and a Solution</li>
<li>Milliman Annual Study on Public Pension Funding</li>
<li>State and Local Government Pension Debts Rise by $268 billion in the Third Quarter of 2015</li>
<li>Video Clip Explaining Teacher Pensions in Less than 3 Minutes</li>
</ul>
<p><strong>Quotable Quotes on Pension Reform</strong></p>
<p><strong>Pension Reform Handbook</strong></p>
<p><strong>Contact the Pension Reform Help Desk</strong><strong>&nbsp;</strong></p>
<p><strong> &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;</strong>&nbsp;</p>
<p><strong>Articles</strong><strong>, Research &amp; Spotlights</strong></p>
<p><strong>How</strong><strong> Will GASB 68 Affect Cities' Reported Funded Status?&nbsp;<br /></strong><em><strong>By Truong Bui, Reason Foundation</strong></em></p>
<p>&nbsp;</p>
<p>In <a href="http://click.email.reason.org/?qs=cb32f1fea46cf015e7c3ea72328ec7f3d4d18f81c8ce6adbc4c8f25379e0a1ab">a recent paper </a>at the Center for Retirement Research at Boston College (CRR), Alicia Munnell and Jean-Pierre Aubry examine how the new provisions of the Governmental Accounting Standards Board (GASB) regarding public pension financial disclosure affects major cities' reported funded status. Specifically, the paper looks at the GASB 68 rule that requires localities that participate in cost-sharing state plans to report their share of that plan's unfunded liability on their books.&nbsp;</p>
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<p>The paper is based on an analysis of 173 major cities, with a focus on 92 cities that are participating in cost-sharing state plans. To estimate a city's share of assets and liabilities, the authors use the city's contribution to a given state plan as a percentage of the plan's total annual required contribution (ARC). In case the ARC information is not available, the ratio of the city's actual contributions to the state plan's total actual contributions is used instead.&nbsp;</p>
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<p>The paper estimates that, for the 92 cities affected, the GASB 68 rule raises their unfunded liability as a percentage of revenue from 37 percent to 70 percent. The impact on the 173 cities is much smaller (only about 9 percentage points increase in the ratio) because the 92 cities are small in terms of revenue. One should note however that GASB 68 does not actually increase pension burdens on these cities, but merely makes them recognize these burdens on their books. The rule therefore may encourage local governments to fund their pensions more responsibly.&nbsp;</p>
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<p>To read the paper, go <a href="http://click.email.reason.org/?qs=cb32f1fea46cf01590811c98d465a12c93b821234c8ea913f90dbebeae2058b1">here</a>.&nbsp;</p>
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<p><strong>An </strong><strong>Examination of Connecticut State Employees Retirement System<br /></strong><em><strong>By Truong Bui, Reason Foundation</strong></em></p>
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<p>The Center for Retirement Research at Boston College (CRR) recently provided an assessment of Connecticut's two largest pension plans: the State Employees Retirement System (SERS) and the Teachers' Retirement System (TRS).&nbsp;</p>
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<p><a href="http://click.email.reason.org/?qs=cb32f1fea46cf015181dcfaef7bbfc8d60318c5304230c6904456e430dbb3a12">The brief </a>shows that the state's SERS is heavily underfunded, with a funded ratio of only 42 percent in 2014, among the lowest in the nation. The pay-as-you-go structure during the 1939-1971 period was a major cause of the plan's current low funded status. Even after the state started to pre-fund the plan in 1971, the unfunded liability has kept growing due to in inadequate contributions, insufficient investment returns, and negative actuarial experience, all of which are commonly present in poorly funded public plans. Among those factors, inadequate contributions have contributed the most to the rise in SERS's unfunded liability since 1985. The substantial pension debt has been translating to high pension costs, which are expected to steadily increase in years to come and may skyrocket if the assumed investment returns do not materialize.&nbsp;</p>
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<p>The brief offers a two-pronged approach to improving the system's finances: 1) a separate, more flexible funding scheme for liabilities associated with members hired before pre-funding; and 2) stricter funding of the ongoing plan, including switching to a level-dollar amortization method and reducing the assumed rate of return.</p>
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<p>To read the brief, go <a href="http://click.email.reason.org/?qs=cb32f1fea46cf0158355796965f357fc51a3e15f385da4f750b7799cb1bb55ac">here</a>.</p>
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<p><strong>State and Local</strong><strong> Government Pensions: Problems and a Solution<br /></strong><em><strong>By Truong Bui, Reason Foundation</strong></em></p>
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<p>A <a href="http://click.email.reason.org/?qs=cb32f1fea46cf0153b8fc11cef8b56103c8e742e2eaa077a00e903a39f465c8b">new study</a>&nbsp;from the Mercatus Center at George Mason University examines the trends and differences between public and private pension plans, the financial condition surrounding state and local plans, and the legal impediments to reform.&nbsp;</p>
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<p>The study starts by noting that while defined benefit plans' popularity has declined significantly in the private sector, they remain prominent in the public sector. When pensions and other benefits are taken into account, government workers enjoy higher compensation than their private counterparts with similar skill levels. In addition, public pensions follow accounting standards that are much looser than those governing private defined benefit plans. &nbsp;</p>
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<p>The financial conditions of public pensions are not promising. Under a fair market valuation approach, 21 states had funded ratios below 40 percent in 2009. On average, state and local governments would need to contribute 14 percent of annual revenue to fully fund their pension plans. Roughly a third of state pension plans are expected to run out of money within the next two decades.</p>
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<p>This bleak financial picture however is not easy to deal with, thanks to rigid legal protections granted to pension benefits. This means pension reforms will have to rely on voluntary choice by plan participants. The study's reform proposal focuses on two features:</p>
<ul>
<li>Requiring governments to disclose the financials of their pension plans to beneficiaries in plain language, using standardized conservative accounting assumptions</li>
<li>Allowing governments to offer beneficiaries a choice to receive a lump-sum buyout of their pension benefits, adjusted by the funded ratio.&nbsp;</li>
</ul>
<p>To read the full study, go <a href="http://click.email.reason.org/?qs=cb32f1fea46cf015152285b765d28dbe435227de5beaf07cd3d2b7e84415fee1">here</a>.&nbsp;</p>
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<p><strong>Milliman </strong><strong>Annual Study on Public Pension Funding<br /></strong><em><strong>By Truong Bui, Reason Foundation</strong></em></p>
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<p>The actuarial and consulting firm Milliman has recently released its <a href="http://click.email.reason.org/?qs=cb32f1fea46cf0159a87aac6a99a1abd0562c03783979aa18eb66cbc25ee81be">annual study</a> exploring the funded status of the 100 largest US public pension plans. Besides using the plan sponsor's own assessment of the funded status, the study also recalibrates each plan's assets and liability based on Milliman's own independent evaluation of the plan's expected investment return.&nbsp;</p>
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<p>The study finds that the aggregate funded ratio increased from 70.7% to 75% through 2014, due to strong investment returns. However, the weak market performance in 2015 will bring down funded ratios, but the effect has not been yet fully recognized because of the time lag in reporting. Overall, the assessed plans have sufficient assets to cover 100% of the reported accrued liability for retirees and inactive members, but have only 39% of the required assets to cover the reported accrued liability for active members.&nbsp;</p>
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<p>During the 2012-2015 period, the median reported investment return assumption decreased from 8.00 percent to 7.65 percent, reflecting the continued decline in long-term expected investment returns. However, the reported return assumption may still overestimate the expected returns. Milliman's independently determined investment return assumption is 7.25 percent, which is 40 basis points lower than the reported 7.65 percent in 2015. As a result, the recalibrated unfunded liability is $1.20 billion (compared with the reported $1.02 billion) and the recalibrated funded ratio is 71.7 percent (compared with the reported 75 percent).</p>
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<p>The study also finds that for the first time, retired and inactive members outnumber active members.&nbsp;</p>
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<p>To read the full study, go <a href="http://click.email.reason.org/?qs=cb32f1fea46cf01539de2bdb4fabe6f9b0ea7aa4404ab6c748885d8e01f5ed42">here</a>.&nbsp;</p>
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<p><strong>State</strong><strong> and Local Government Pension Debts Rise by $268 billion in the Third Quarter of 2015<br /></strong><em><strong>By Truong Bui, Reason Foundation</strong></em></p>
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<p>A <a href="http://click.email.reason.org/?qs=cb32f1fea46cf01570b4b4c38d0ff555bca8ccac709b346faf7d9fcb16d67135">recent brief </a>at the Rockefeller Institute of Government revealed that state and local government unfunded pension liabilities increased by $268 billion in the third quarter of 2015, owing to poor investment returns. That increase was equivalent to 1.4 percent of the US GDP, raising the unfunded liabilities to 9.5 percent of GDP.&nbsp;</p>
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<p>The brief also offers an interesting observation: over the last 25 years, unfunded liabilities have increased by 1.4 percent or more of GDP in thirteen quarters, while they have decreased by 1.4 percent or more in only two quarters.</p>
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<p>To read the brief, go <a href="http://click.email.reason.org/?qs=cb32f1fea46cf015eeec16d21d180999a5b9b1f3a4cad953b6667b1228ed6aa7">here</a>.&nbsp;</p>
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<p><strong>Video</strong><strong> Clip Explaining Teacher Pensions in Less than 3 Minutes<br /></strong><em><strong>By Truong Bui, Reason Foundation</strong></em></p>
<p>&nbsp;</p>
<p>This short <a href="http://click.email.reason.org/?qs=cb32f1fea46cf0154b1c311cb77419b3a62872432c83469af26f8f759e049652">video clip</a> created by <a href="http://teacherpensions.org/">TeacherPensions.org</a> tackles the popular notion that public teacher pensions are good for teachers in general.&nbsp;</p>
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<p>Using simple examples, the clip explains how the heavily back-loaded structure of most teacher pensions primarily benefits long-career teachers, at the expense of short- and mid-career ones, and of teachers who do not stick to one state for their whole-career. The clip then shows that alternative retirement structures could bring about more equitable and inclusive distributions of retirement benefits.&nbsp;</p>
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<p>Watch the video clip <a href="http://click.email.reason.org/?qs=cb32f1fea46cf015224ea8423cb811ce76df3b1f9734409dcda932afe4f09a97">here</a>.</p>
<p>&nbsp;<strong> &nbsp; &nbsp; &nbsp; &nbsp;</strong></p>
<p><strong>Quotable</strong><strong> Quotes on Pension Reform</strong></p>
<p>&nbsp;</p>
<p>"Because California's UAAL's accrue interest at a high rate (7.5%, which is twice the current yield on CA General Obligation Bonds (GO's) for the same maturity), $24 billion of additional UAAL's will translate into well over $50 billion of service cuts and/or tax increases over the next three decades. To put the single-year addition of $24 billion of debt obligations into perspective, that amount is nearly one-third of the total amount of outstanding GO's. GO's are voter-approved. UAAL's are not."<br />- <em><a href="http://click.email.reason.org/?qs=cb32f1fea46cf015fbd8737d5afcfa05a47f3acfabaaa9a1ff16e2e6bcddc298">David Crane, Lecturer, Stanford University</a></em></p>
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<p>"Most pension portfolios have a long-term investment return target between 7 and 8 percent a year. Historically, plans achieved that with relative ease. But a lot has changed in the past 20 years. In 1992, the median pension fund's assumed rate of return was 8 percent, and U.S. Treasury securities paid out 7.67 percent, according to an analysis by the Pew Charitable Trusts and the Arnold Foundation. That means a pension portfolio's overall investments only had to perform slightly better than the bond market -- not a very big gamble. By 2012, pension plans had lowered their return assumptions to a median 7.75 percent, but the 30-year Treasury bond returns had plummeted to just under 3 percent. The pressure on pensions to boost investment returns intensified tenfold."<br />- <em><a href="http://click.email.reason.org/?qs=cb32f1fea46cf015a97a31dda45e39afa68fbc852150e1f78c2733e290005fab">Liz Farmer, Staff Writer, Governing magazine</a></em></p>
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<p>"Every year we delay serious pension reform, public employers make more unsustainable promises to new employees, and public retirement debts grow. We need pension reform to protect our education system and vital public services from these fast-growing burdens."<br />- <em><a href="http://click.email.reason.org/?qs=cb32f1fea46cf01558551d4cdace84847f143845fcc087b3128a591aeac325ec">Chuck Reed, former Mayor of San Jose, and Carl DeMaio, former Member of San Diego City Council</a></em></p>
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<p>"At the root of the problem is a change in the financial structure of public pension funds. Whereas in the early days of government pensions governments expected more than half the money to pay benefits would come from taxpayer and worker contributions, pension systems increasingly came to rely on risky investments to pay retirees."<br />- <em><a href="http://click.email.reason.org/?qs=cb32f1fea46cf015ce88b715902a6e41a786718c209f919f9c2eef8a2af7841d">Steven Malanga, senior editor of City Journal and senior fellow at the Manhattan Institute</a></em></p>
<p>&nbsp;<strong> &nbsp; &nbsp;&nbsp;</strong></p>
<p><strong>Pension </strong><strong>Reform Handbook</strong></p>
<p>&nbsp;</p>
<p>For those interested in the process and mechanics of pension reform, Reason Foundation published a <a href="http://click.email.reason.org/?qs=cb32f1fea46cf01512568ec521cb92dd637ab0c8caed817df957db8d3024ea65">comprehensive starter guide </a>for state and local reformers. This handbook aims to capture the experience of policymakers in those jurisdictions that have paved the way for substantive reform, and bring together the best practices that have emerged from their reform efforts, as well as the important lessons learned.&nbsp;</p>
<p>&nbsp;</p>
<p>To access the handbook, go <a href="http://click.email.reason.org/?qs=cb32f1fea46cf01502af1ec690f35cc6ce02794ee88f99b5b2867517e25b780c">here</a>.</p>
<p>&nbsp;<strong> &nbsp; &nbsp; &nbsp;</strong></p>
<p><strong>Contact</strong><strong> the Pension Reform Help Desk</strong></p>
<p>Reason Foundation set up a Pension Reform Help Desk to provide information on Reason's work on pension reform and resources for those wishing to pursue pension reform in their states, counties, and cities. Feel free to contact the Reason Pension Reform Help Desk by e-mail at <a href="mailto:pensionhelpdesk&#64;reason.org">pensionhelpdesk&#64;reason.org</a>.</p>
<p>***</p>
<p><em><em>Follow the discussion on pensions and other governmental reforms at&nbsp;</em><em><a href="http://click.email.reason.org/?qs=83556dccf6e2df5399fed654e27351deb246d3b0b886988bf38e19b7254a7fde">Reason Foundation's website</a>&nbsp;</em><em>or on&nbsp;</em><a href="http://click.email.reason.org/?qs=83556dccf6e2df5331e22822953eeecac8fe650160149537591942b8cb7cfc6e"><em>Twitter &#64;ReasonReform</em></a><em>. As we continually strive to improve the publication, please feel free to send your questions, comments and suggestions to&nbsp;</em><a href="mailto:adrian.moore&#64;reason.org"><em>adrian.moore&#64;reason.org</em></a><em>.</em>&nbsp;</em></p>
<p><em><strong>Adrian Moore<br /></strong></em><em><strong>Vice President, Policy<br /></strong></em><em><strong>Reason Foundation</strong></em></p>
<p>&nbsp;</p>
<p>&nbsp;</p>1014456@http://www.reason.orgTue, 16 Feb 2016 16:23:00 ESTadrian.moore@reason.org (Adrian Moore)